Mortgage Protection Insurance (MPI) offers a safety net against financial hardship in the event that a primary earner in the household passes away before the mortgage is fully paid. It provides peace of mind knowing that your mortgage payments will be covered if an unfortunate accident or health issue leads to death or disability.

How Mortgage Protection Insurance Functions

When unforeseen events occur, mortgage protection insurance can help safeguard your home. You pay a fixed premium for the policy duration. If you die during this period, the insurance provider disburses a death benefit. In case of a disabling injury, MPI allows you to continue making your monthly mortgage payments.

The type of death benefit depends on the specific policy you choose. Traditionally, mortgage protection insurance was intended to settle the remaining mortgage balance. Nowadays, many policies offer a payout equal to the original mortgage amount, regardless of the outstanding balance. Beneficiaries can use these funds to pay off the mortgage entirely or for other expenses.

You can purchase this policy when you buy your home or within a specific timeframe after closing, typically between 13 to 24 months, and in some cases, up to 5 years with certain providers. This insurance is usually available on a guaranteed acceptance basis, making it a great option for individuals with health concerns who might find it difficult to obtain insurance or who may face higher rates.

The cost of mortgage protection insurance is influenced by factors such as the insured’s age, the mortgage amount, and whether the insured is a smoker. If you’re in the process of buying or have recently acquired a home, our local agent at Ocon Insurance Agency TX, Dallas, Texas, can help you with mortgage protection insurance.