What is mortgage protection insurance?
Mortgage protection insurance policies function as a type of life or disability insurance. The cost of the monthly premium varies depending on the amount of the mortgage, your age and your health. MPI policies in general only cover the principal and interest portion of a mortgage payment, so other fees like HOA dues, property taxes and homeowners insurance would still be your responsibility. You might be able to add a policy rider, however, to cover these expenses. Some policies are designed to help those living in your home, or your loved ones, with making the mortgage payments in the event of your passing. For example, if you die with a balance on your mortgage and have an MPI policy, your insurer pays the remainder of the balance directly to your lender. Your partner or your heirs won’t have to worry about making the remaining payments or losing the home. Some MPI policies are designed to help cover or reduce your monthly mortgage payments if you lose your job or face a serious disability that prevents you from working. The terms of these policies vary. For example, Bank of Montreal’s mortgage protection insurance for a disability can cover 50 percent or 100 percent of your mortgage payment for up to two years, and for a job loss, 50 percent or 100 percent of the payment for up to six months. Some policies have waiting periods, such as 30 or 60 days, before these payments are made. Learn more #dontpanicwithurbanik Share post