7 in 10 American households are
dependent on two incomes
Mortgage Protection Insurance
Purchasing a home is one of the most exciting decisions that you can make. It’s a place of comfort and shelter. It’s a place to gather your friends and family. It’s your small corner of the world where your life happens. But with so much that you love revolving around your home, you want to make sure you protect it long after purchase. As the largest financial obligation that most families will ever take on, can your family manage the responsibility a home can bring to your budget if something happens to you? Thankfully, there are ways to help make sure they can!
Mortgage protection insurance can ensure that even in the event of your death or disablement, your home can remain a welcoming, nurturing place for your family. Read more to learn if mortgage protection insurance is right for you.
Is mortgage protection available for you?
If you own a home with a mortgage, you’re probably eligible for mortgage protection insurance. Mortgage protection insurance policies vary, but they typically cover events like job loss, disability, or death. If you lose your job or become disabled, the insurer will send payments directly to the mortgage company after a certain amount of time. In the event of your death, the policy will pay off the mortgage completely, leaving your family secure in their home.
It’s important not to confuse mortgage protection insurance with private mortgage insurance, or PMI. If you make a down payment of less than 20 percent of the purchase price of your home, you’re typically required to have PMI. If you get your home through a government-issued FHA loan, you’ll have a Mortgage Insurance Premium (MIP) as a condition of closing. MIP serves the same function as PMI, but it has a different name since it’s through the government instead of a private company.
These types of insurance aren’t about protecting you – they’re about protecting the bank. They pay your lender in the event that you get foreclosed on.1, 2 You can still choose to have mortgage protection insurance that helps protects you and your family even if you have MIP or PMI through your home loan.
How likely is it that will you be accepted for mortgage protection insurance?
As long as you have a home with a mortgage on it, then it’s typically guaranteed that your application for mortgage protection insurance will be accepted. This type of coverage can be valuable for people with long-term health issues, or people who work high-risk jobs. Conditions that can raise the cost of life insurance or disability insurance – or even get you turned away from having them – don’t have as much bearing on mortgage protection insurance.