Mortgage Protection Insurance: Do You Really Need One?

tammie carter johns creek real estate agentDo you really need a mortgage protection insurance? If you are currently paying your mortgage, there is a high probability that you have received such offers. Basically, this type of insurance covers your mortgage in the event of job loss, disability or death. However, some homeowners can’t help but feel that their mortgage company is just using it to take more of their hard-earned money on a monthly basis.

So, what’s the real score on this one? To know if you will really benefit from getting a mortgage protection insurance (MPI), here are some things you may need to consider.

Understanding the Pros and Cons of MPI

The Benefits

  • MPIs are issued on a guaranteed acceptance basis. This means that everyone can get coverage, including those with pre-existing medical conditions and high-risk occupations.
  • It provides peace of mind. With an MPI, you will never worry about losing your home in the event of job loss, disability or death.

The Drawbacks

  • It has maximum payment limitations. Instead of providing a sum of money equal to your monthly wages, you will only get a set amount as defined in your contract.
  • It is more expensive than term life insurance. Most people don’t buy MPIs due to its high cost.
  • It provides declining payout. While you may be paying the same premium throughout the duration of the policy, the coverage and the payout also decreases over time.

Given these facts, would you benefit from purchasing an MPI? It really depends on your health and personal circumstances. As a rule, MPIs are great alternatives for those who have health concerns or risky jobs that may prevent them from getting life or disability insurance. However, if you don’t belong to any of these groups, and have loans at or less than 80% of your home’s value, then you may want to consider other alternatives that may provide better value for your money.

About the Author

As a 15 year resident of Forsyth County, Tammie has spent the last 10 years using her insider knowledge to find her clients just the perfect home in their neighborhood of choice. Her past experience as an appraiser and loan officer allows her to assist her clients in selecting the best property for their family’s needs. Learn more at

Image by fantasista at


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s