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Understanding Mortgage Insurance Basics

Mortgage Insurance, by principle, is designed to insure the debt you owe on your home, real estate, or other property. This insurance, in essence, is designed to protect and guarantee that should your home be foreclosed on, illness or disease strike you, or any other act of God occur, that your bank will still be paid off the debt in which you owe on your home or property mortgage agreement.

Mortgage Protection Insurance, also known as MPPI, is provided to ensure that your home is paid off, and is a form of life insurance that protects the aforementioned should you die or become disabled.

Private Mortgage Insurance (PMI) on the other hand however is more particular, and just that, privately-run. Therefore, you can expect higher interest rates and modified criteria for eligibility in comparison to MPPI, perhaps in favor or against you dependent upon your circumstances. In fact, PMI is required for any 'home owner' that put 19% down or less on their home mortgage. That is, as a guarantee to your bank that they will still get paid, regardless of your ability to do such in any of the aforementioned scenarios.

While some might consider themselves to be in a position to benefit from an MPPI or PMI, it's worth further researching and investigating the costs and benefits of such a policy for you - especially since the longer you pay the less value the premium has, as you've paid more and more into the value of your mortgage itself over time and are therefore going to be covered less, yet charged the same amount or more dependent upon your contract and/or the market.


Many people have found Level Life Insurance policies to be much more generous, as well as practical in not only paying off their entire mortgage should they pass, but also retroactively covering, and offering base-coverage in the future of salary and net income of your deceased loved one - on a continued basis, dependent upon the contractual agreement. Last but not least, it's worth noting and understanding that through any and every one of these contracts and plans that there is a waiting period for making claims, some longer than others - ranging anywhere from 1 month to 365 days or more, so use your discretion in such.




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