Hello, fellow homeowners and future buyers! Today, we’re talking mortgage protection insurance, or MPI, and I’m sharing ten things I wish I knew before I started my journey.
#1: MPI isn’t for everyone. It’s mainly beneficial for individuals with high-risk health conditions or occupations. If that’s not you, a standard life insurance policy may offer better value.
#2: The premiums don’t decrease. Even though your mortgage balance shrinks over time, your MPI premiums will remain constant.
#3: The payout goes to the lender. Unlike life insurance, the MPI payout goes directly to your mortgage company, not your family.
#4: There’s a limited coverage period. MPI only covers your mortgage balance during the term of your mortgage. If you outlive your mortgage, you’re out of coverage.
#5: It doesn’t cover home maintenance. Despite the name, MPI doesn’t pay for repairs or property taxes. It’s not a home warranty.
#6: There’s often a wait period. If you lose your job, MPI doesn’t kick in immediately. There’s usually a waiting period of around 30 days.
#7: Not all job loss is covered. Self-employed folks, take note. MPI typically only covers involuntary job loss.
#8: Pre-existing conditions matter. MPI providers often exclude pre-existing conditions from coverage.
#9: You don’t have to buy MPI from your mortgage lender. Shop around and compare policies to find the best one for you.
And lastly,
#10: There’s no cash value. Unlike some life insurance, MPI doesn’t accumulate cash value over time.
So there you have it, ten nuggets of wisdom I wish I had known about MPI earlier. Remember, knowledge is power when it comes to your financial decisions.
