Mortgage Protection

What is it?

Mortgage Protection Insurance (MPI) is a form of life insurance designed for the purpose of paying off a mortgage in full or in part in the event of death or sickness. Typically MPI is a term life policy that matches the term length of your mortgage and ends the same time as your mortgage. With most MPI policies, the beneficiary is the mortgage lender, but our policies allow you to select a beneficiary of your choosing. 

Mortgage Protection vs PMI

Mortgage Protection Insurance (MPI)

Protects you and your family. 

Optional. 

If you get sick or pass away, this type of insurance pays you or your beneficiary a lump sum of cash to help pay off the mortgage or other bills.  Simple, easy to qualify for and usually cheaper than expected.

Private Mortgage Insurance
(PMI)

Protects the lender. 

Required. 

If you purchase a home and don’t have the capital to put 20% down then you have to pay PMI. This type of insurance protects the mortgage lender in the event you cannot make your mortgage payment and your home goes into foreclosure. 

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Traditional Mortgage Protection Insurance

Traditional MPI in most circumstances is outdated and unnecessary. This type of policy is much like term life insurance except for a few key points. One of the few caveats is this type of insurance usually requires no underwriting so this might be better for you if you are in very poor health and are not insurable with normal life insurance.
  • Beneficiary is the mortgage lender, not your family
  • More expensive compared to term life policies
  • Premiums can be fixed for the first few years with the potential to go up after that
  • The policy amount decreases as the amount your owe on your mortgage decreases
  • Cannot be converted into a permanent policy at the end of the term
  • Most policies don't offer living benefits

Our Mortgage Protection Insurance

Unlike traditional MPI our mortgage protection plans are term life insurance policies for the purpose of covering your mortgage payments in the event of death or sickness.  As with most types of life insurance, underwriting is a necessary step. Though, today’s underwriting is streamlined and medical exams are no longer necessary for those under age 65.

  • Since this is a term life insurance policy, the beneficiary is of your choosing
  • Often much cheaper than traditional MPI
  • Premiums are fixed for the duration of the policy and guaranteed to never increase
  • Amount doesn't decrease over time so leftover money can be used for other bills
  • The ability to convert your policy into a permanent policy without underwriting
  • Living benefits attached with no extra charge

Who Needs Mortgage Protection?

Mortgage Protection Insurance is a good idea for most people and families. In any scenario where the family is dependent on one or two sources of income to pay the mortgage and other bills MPI is highly recommended. Additionally, If the death or critical sickness of an individual would cause significant financial stress, we would recommend MPI as well. 

However, there are a few scenarios where MPI doesn’t make sense and we would advise against purchasing a policy. Most often if the mortgage can be paid off with other financial assets such as a 401(k), if you are an adult where your death would not create a financial strain for another person, or if you are in a dual income scenario where if one person were to pass away or become sick and you could still afford your mortgage, we would not recommend the added cost of MPI. 

Do you need Mortgage Protection?

If you’re worried your loved ones can’t afford the financial obligations when you pass away or become sick, speak with a licensed advisor to see if mortgage protection makes sense for you.
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