What is Mortgage Protection Insurance?
Having a mortgage is one of the largest financial obligations you will have in your lifetime. Mortgage protection insurance is there in case the homeowner unexpectedly passes away. In essence, mortgage protection insurance acts very similarly to life insurance but the death benefit is geared directly to the mortgage being paid off versus a general life insurance policy’s benefit going to the survivor for whatever they deem it is for.
Mortgage protection insurance is really there to ensure the home does not go into foreclosure. Also, some of these policies provide a coverage benefit in case of a loss of job or becoming disabled.
The mortgage insurance policy is different whereby the benefit is not a person but rather the mortgage company. The premiums are typically paid monthly though various payment options are available based on the carrier you choose.
Finally, mortgage insurance policy’s have what is termed guaranteed acceptance. There is no screening for health and your occupation. In other words, there is no underwriting process. Because of this, premiums on mortgage insurance policies are typically higher than on a life insurance policies.
As always, consult with your trusted mortgage professional to learn more on this and whether it is right for you.