If the breadwinner(s) at your home dies or becomes disabled, will your family be able to afford to stay there without financial pressure?
Mortgage protection is a supplemental life insurance policy to the one you, hopefully, had in place before adding additional debt by refinancing a mortgage or purchasing a new home. It protects you - not the bank - and should not be confused with Private Mortgage Insurance (PMI), or even with homeowner's insurance.
All mortgage protection is life insurance, but not all life insurance is mortgage protection. Different policies can wear different hats. Consider…a Porsche and a Volkswagon Bus are both automobiles, but they have distinctly different functions...
The beneficiary of a mortgage protection plan is the person responsible for paying for the home after the insured dies. That person receives the death benefit, which is usually part or all of the original loan amount, based on whether the insured wanted his/her family to continue to live in the house, or have time to grieve and then sell it without financial pressure to rush the process.
Statistically, homeowners face exposure towards losing their homes not only to death, but also in the event of Terminal Illness, Chronic Illness, Critical Illness and/or Critical Injury. Modern life insurance contracts designed with mortgage holders in mind allow the death benefit to be used early in the above scenarios if financial relief is needed during the life of the insured, rather than having the family wait until if and when he/she passes away. With this program, you have options.
Finally, your mortgage protection plan can be designed to refund your premiums if you outlive your mortgage...or even help your dollars wear two hats by both paying to protect you, while helping you pay-off your mortgage early.
If you die or become disabled tomorrow, what do you want to happen to your home?