Are you a homeowner in California looking for peace of mind? Mortgage Protection Insurance is an invaluable resource, shielding your family from financial hardship if your primary source of income suddenly disappears. With the right policy, you can preserve your home and lifestyle, even in dire circumstances. This complete guide will discuss how mortgage protection insurance works, its benefits, and how to get coverage in California.
What Is MPI in Mortgage?
Essentially, mortgage protection insurance (MPI) is a type of life insurance designed to pay off your mortgage if you pass away. Some policies also cover mortgage payments for a limited time if you become disabled, so you and your family can adjust to the new situation before re-evaluating your living situation.
You mustn’t confuse MPI with private mortgage insurance (PMI), which protects the lender if you default on the loan. With PMI, your family would still owe the loan balance if you passed away.
Mortgage protection insurance means if you or the breadwinner of your family passes away, the family could grieve, adjust, and make some really big decisions before needing to think about the cost of the house. There won’t be an emergency where a large bill is due and no way to pay it so soon after the death of a loved one. You’re providing peace of mind for your family!
What Does Mortgage Protection Insurance Cover?
In California, mortgage protection insurance covers the entire outstanding balance of your loan. The death benefit is an amount equal to the balance of your mortgage at the time of your passing. However, it can be reduced over time if you make larger-than-required payments or pay off part of the loan.
It’s essential to understand that the death benefit is given directly to your creditor, not your loved ones. This guarantees that the remaining debt is paid in full and that your loved ones are spared the financial strain.
Mortgage protection insurance can also provide temporary coverage if you become disabled for an extended period (usually six months to a year). During this time, the policy will pay your mortgage payments, so you don’t have to worry about losing your home.
Benefits of Mortgage Protection Insurance
There are many advantages to getting a mortgage protection insurance policy in California. Some of the top benefits include:
- Guaranteed approval: Even if you’re in poor health or work in a dangerous profession, there is guaranteed approval with no medical exams or lab tests. The same isn’t true for life insurance.
- No confusion: The check goes straight to the lender for the exact mortgage balance, so there’ll always be enough, and your family won’t have to handle the money.
- Disability protection: As stated above, some MPI policies make a few mortgage payments if you become disabled and cannot bring in the same income you were accustomed to.
MPI vs. PMI vs. MIP
It is important to note that MPI, PMI, and MIP are all different types of insurance. Mortgage protection insurance (MPI) is designed to pay off a mortgage in case of your death. Private mortgage insurance (PMI) protects the lender if you default on the loan. In contrast, a Federal Housing Administration (FHA) loan requires a mortgage insurance premium (MIP).
MPI is the only type of insurance that can protect your family from having to pay off a mortgage loan if you pass away. PMI will not cover any costs, while MIP is an upfront fee and regular premiums you must pay to get an FHA loan.
Get Your MPI from Pronto Insurance
Do you want to buy mortgage protection insurance but don’t know where? Pronto Insurance understands that life insurance can be daunting, so we make it easy and affordable to get mortgage protection insurance in California. You can even apply online in minutes and have your policy in place within the same day.
For more information about getting MPI coverage for your home loan, contact Pronto Insurance today! Our knowledgeable agents are here to answer any questions you may have and provide further assistance.