Mortgage Protection Insurance (MPI) is getting a lot of attention now that so many Americans are concerned about job security. For most people the highest debt they will have in their lifetime is the mortgage on their home. Unfortunately, there are many scenarios that can come into play that might hinder a person from having the money to make their monthly mortgage payment. Sickness, injury, unemployment and death are all unpleasant yet common occurrences. When the main breadwinner of a family is affected, there is a way to be sure that the mortgage payment will still be paid no matter what.
Tip 1: Mortgage Protection Insurance during Unemployment
In this economy fraught with record high foreclosures, many homeowners are asking, “Is there any way to insure mortgage protection?” The reassuring answer is a resounding, “Yes”. Unemployment Mortgage Insurance is available to new homeowners and to those who are refinancing. It is offered at competitive rates, for varying amounts, over differing periods of time.
Tip 2: Know How Much You Need
For example, should a homeowner lose his/her job, coverage could be for $1,000 per month for four months, $1,500 per month for three months, or $2,000 a month for six months. The specific Mortgage Protection Insurance amount would be paid while the homeowner looked for a new employment. You’ll need to determine your own requirements.
Tip 3: Tailor Mortgage Protection Insurance to Your Needs
Many companies offer competitive rates and a wide variety of options for Mortgage Protection Insurance based on the reason for the need (including illness and injury, as well as unemployment), the amount of the mortgage, and the term of the insurance. Homeowners can tailor their insurance to align with their circumstances.
Tip 4: Mortgage Protection Insurance as Life Insurance
Another type of Mortgage Protection Insurance deals with the unexpected death of the homeowner. This Mortgage Protection Insurance is actually a type of life insurance policy that upon the death of the insured meets the mortgage obligation of the deceased on a monthly basis, or pays off the entire mortgage in a lump sum.
Tip 5: Look into MPI vs. Term Insurance
Some lending institutions offer to actually pay for the premiums for Mortgage Protection Insurance, yet the increased cost to the lender shows up in the interest rate of the loan. Another possible option is the return of premium (ROP) to the homeowner at the end of the policy term. This benefits both the insurer because they know their investment is secure, and the insured because their total premium is eventually returned to them. There is debate among insurance professionals concerning this kind of Mortgage Protection Insurance. Some believe that a Term Life Insurance policy is economically wiser and provides the same security and coverage.
Tip 6: Research Mortgage Protection Insurance
Mortgage Protection Insurance, whether it is for unemployment, disability, or death is well worth the time to research to determine if the value of the additional investment (premiums paid for coverage) is worth the potential value of the loss, both financial and personal (your mortgage and home).
Tip 7: Use Competition to Your Advantage
Since there are so many insurers out there who want to provide you with this product, use that fact to your advantage. Get quotes from several, compare the cost and benefits, and decide if one of those Mortgage Protection plans is right for you.