Mortgage Protection Insurance: What to Know Before You Buy


If you’re like most people, your house is the biggest investment you’ll ever make in your life. Especially here in our state, even a modest home costs several hundred thousand dollars. It makes sense that you’d want to protect this investment as much as possible. That is why California homeowners insurance is here!

But what happens if something goes wrong, very wrong? Losing the breadwinner of your family isn’t just emotionally devastating, it’s also financially catastrophic. If 2020 has taught us one thing, it is that no one is promised a healthy tomorrow. This is precisely why more and more people are looking into mortgage protection insurance.

What is Mortgage Protection Insurance (MPI)?

Essentially, mortgage protection insurance (MPI) is a type of life insurance designed to pay off your mortgage if you were to pass away. Some policies also cover mortgage payments for a limited period of time if you become disabled, so you and your family can adjust to the new situation before re-evaluating your living situation. It is important that you don’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 balance of the loan 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!

The Benefits of Mortgage Protection Insurance

#1 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.

#2 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.

#3 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.

What’s not so good about MPI?

#1 Lack of flexibility. MPI gives beneficiaries no choice. The insurance pays off the mortgage and nothing else. Remember, your family doesn’t even see the money.

#2 Higher cost. MPI typically costs more than term life insurance. This is especially for healthy, responsible adults.

#3 Shrinking coverage. As your mortgage balance declines, the policy’s payout declines right along with it. That means you’ll end up paying the same cost for less coverage over time!

Contact Pronto Insurance

If you’re ready to learn more, we’re here to talk. Contact us and let’s go over the specifics of your situation and what kind of protection you need.

Start Saving! It’s simple.


Buy Online!

Get cheapest insurance quotes instantly.
Location pin icon
Been here before? Review your quotes.

Call Our Agent

Our licensed agents are ready to help you save.