Mortgage Protection Insurance: How to save money on it
Mortgage protection insurance (MPI) should not be confused with mortgage loan insurance. Mortgage loan insurance is required by law to protect your lending institution if you default with payments when you buy a house with a 20% or less down payment.
On the other hand, mortgage life insurance is designed to help you in the event of a sudden illness or accident and death. Depending on the coverage you choose, it will pay off your loan balance in the event of your death, or if you cannot work because of an illness, it will pay some monthly repayments.
Even though experts advise that you need mortgage protection, they also argue that term life insurance is the best way to save money.
How does mortgage protection insurance work?
Banks do not require mortgage protection insurance (MPI) for loan approvals, but it offers disability, job loss, and death cover. The monthly premium depends on the amount of the loan, the health, and the insured’s age. If disability coverage is required, the premiums will depend on the occupation of the mortgage holder.
If the mortgage holder dies, the heirs do not have to worry about making loan repayments or losing their home because it is paid off by the insurer. If the policy has a job loss or disability coverage, the loan will be covered by the policy, depending on what type the policy is structured; typically, it is anything up to two years.
Advantages of mortgage protection insurance
Mortgage protection insurance (MPI) is effortless to get, and typically, no medical exam is required. For people who disqualify from other life insurance or have extremely high premiums because of a pre-existing condition, mortgage protection insurance (MPI) is the right solution.
Often, people use Mortgage protection insurance (MPI) to supplement other life insurance policies. In the event of their death, the money from the MPI is used to pay off the mortgage balance, while the money from the life insurance policy can go towards other living expenses.
Disadvantages of mortgage protection insurance?
One of the disadvantages is that most mortgage protection does decrease over time, whereas the premiums remain level. Once the mortgage term is completed, or even if it is repaid early, the coverage ends, and no money is paid out.
Also, mortgage protection insurance (MPI) is like life protection, but you do not have to undergo a medical exam. This means that the insurance company is taking an added risk, and that is why MPI has higher premiums. On a $120,000 mortgage, the most basic MPI will have a $50 monthly premium. However, if you are young and healthy, you may be able to obtain a policy at a lower monthly premium.
There are more exclusions when a mortgage life insurance pays a death benefit than on regular term life insurance.
The money (death benefit) of the mortgage protection insurance (MPI) is paid directly to the lender, and the family of the deceased has no say in how the funds are to be used.
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How can you save money on mortgage protection insurance?
Term life insurance is one of the most affordable ways for people to ensure their heirs’ financial protection. This is because they are medically underwritten, and they have few exclusions about the type of death that is covered. In a term policy, these exclusions are suicide within the first two years and an illness that was intentionally not disclosed. Term insurance can offer far more than the repayment of the mortgage repayment; it can cover all the family’s financial responsibilities if the primary breadwinner dies.
Also, the insured can choose the amount they want to cover their family with, and the term can be anything up to thirty years.
Conclusion
Insurance gives us peace of mind, but life insurance is the cheapest option for you if you want to save on mortgage protection insurance. Nowadays, purchasing the right life insurance is quite simple. Just go to the AplusWealth life insurance quote, and punch in the type of life insurance, the period of life insurance, and the coverage amount you want to find out what company offers you the best life insurance price.
AplusWealth is here to help you to protect your mortgage and obtain the Life insurance you need.
Finding the right Life insurance policy with the proper coverage amount at the right price is complicated and overwhelming. Our expert advisers are fully qualified to help you work out the coverage that will meet your family’s needs by taking your age and health, liabilities, and goals into consideration. At Apluswealth, you can get a quote, compare quotes, and find the life insurance quotes which make you feel comfortable.
Contact our expert advisers today and find out which is the best life
insurance for you. We are here to help you cover your mortgage liabilities and find suitable mortgage insurance. Our life insurance advisors will provide you with quotations and the most appropriate policy types.
The purchasing life insurance process from Apluswealth is designed to be super easy, online, and fast. If you know what type and amount of coverage you are looking to get, get your quote using our software and click apply online. However, if you require assistance from our expert advisors, we will set up an online or in-person meeting with you to review your needs analysis and assist you with making your decision.
Depending on the amount of coverage and the life insurance provider you have chosen, you may or may not be required to complete a medical examination. Once the medical review and the underwriting process are complete, you will be offered your insurance coverage, and the process is completed. Start covering your family from today.
Email: Contact@apluswealth.com
Tel: 1-888-461-6120