Mortgage protection insurance (MPI) is a type of insurance policy designed to pay off your mortgage in the event of your death, disability, or unemployment. The purpose of this insurance is to provide financial security to your loved ones and ensure that they can keep their home even if you are no longer able to make mortgage payments.

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There are typically three main types of coverage offered under mortgage protection insurance:

1. Death benefit: This pays off the remaining balance of your mortgage if you pass away during the term of the policy.

2. Disability benefit: This provides coverage if you become disabled and are unable to work, helping to cover mortgage payments for a specified period.

3. Unemployment benefit: Some policies offer coverage for involuntary unemployment, which can help cover mortgage payments for a certain period if you lose your job through no fault of your own.

 

It's important to carefully review the terms and conditions of any MPI policy you're considering, as coverage can vary widely between providers. Some key factors to consider include the coverage limits, waiting periods before benefits kick in, and any exclusions or limitations on coverage.

It's also worth noting that MPI is different from private mortgage insurance (PMI), which is typically required by lenders if you make a down payment of less than 20% on your home purchase to protect the lender against the risk of default. While PMI protects the lender, MPI is designed to protect you and your family in case of financial hardship.