What is mortgage protection insurance?
Mortgage protection insurance (MPI) is a type of life insurance designed to pay off your mortgage if you were to pass away — and some policies also cover mortgage payments (usually for a limited period of time) if you become disabled.
Why do I need mortgage protection insurance?
Mortgage protection insurance helps your family avoid foreclosure if you die while you owe money on your mortgage loan. Some MPI policies may also compensate you for a limited time if you become disabled or lose your job. MPI works in the same basic way as a term life insurance policy.
How does it work?
MPPI can cover your monthly repayments in full so long as they don’t exceed 65% of your gross annual salary and is available for both repayment (capital and interest) mortgages and interest-only mortgages.
Most plans that cover your mortgage will pay out for up to 12 months or until you return to work – whichever is sooner.
