Mortgage Protection Insurance (MPI) is a life insurance policy designed to pay off your mortgage if you die, become disabled, or lose your job. It ensures your home stays in your family’s hands even if you can’t make payments due to unforeseen events.

🏠 What Mortgage Protection Insurance Covers

MPI typically includes:

• Death Benefit: Pays the remaining mortgage balance directly to your lender if you die during the policy term.
• Disability Coverage: Some policies cover monthly mortgage payments if you become temporarily or permanently disabled.
• Job Loss Protection: May cover payments for a limited time (e.g., 6–12 months) if you lose your job involuntarily.

Unlike traditional life insurance, MPI is mortgage-specific—it’s tied to your loan balance and lender.

📋 Policy Features and Terms

• Beneficiary: The lender is usually the direct beneficiary, not your family.
• Coverage Term: Matches the length of your mortgage (e.g., 15 or 30 years).
• Declining Benefit: The payout amount decreases over time as your mortgage balance shrinks.
• Premiums: Can be fixed or increase with age; often paid monthly and may be bundled with your mortgage payment.

💡 Real-Life Example

Scenario: A homeowner with a $300,000 mortgage dies unexpectedly. Their MPI policy pays the remaining balance directly to the lender, allowing the surviving spouse and children to stay in the home without worrying about mortgage payments.

Alternative: Without MPI, the surviving family must either assume the mortgage, refinance, or sell the home—potentially under financial stress.

✅ Eligibility Criteria

• Age limits (typically 18–65)
• Health screening or questionnaire
• Employment verification (for job loss coverage)
• Mortgage type (fixed or adjustable loans usually qualify)

💰 Cost Factors

MPI premiums depend on:

• Age and health
• Mortgage amount and term
• Coverage options (death only vs. death + disability + job loss)
• Insurer and underwriting process

Typical premiums range from $30 to $100/month, but vary widely.

⚖️ Pros vs. Cons

🧠 Is MPI Right for You?

MPI may be a good fit if:

• You have dependents who rely on your income
• You’re concerned about losing your home due to death or disability
• You don’t qualify for traditional life insurance

However, term life insurance often offers more flexible coverage at a lower cost, allowing your family to use the benefit as needed.

For clients navigating mortgage decisions or seeking layered protection, MPI can be a reassuring option—especially when paired with broader life or disability coverage.

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