We are an independent, advertising-supported comparison service. Our objective is to empower you to make confident financial decisions by giving you access to interactive tools and financial calculators, publishing original and unbiased content, and allowing you to conduct free research and information comparisons.
Issuers that Bankrate has partnerships with include American Express, Bank of America, Capital One, Chase, Citi, and Discover, among others.
Yo, what’s up, peeps? Ever heard of mortgage protection insurance (MPI)? It’s like a safety net for your mortgage, ensuring it gets paid off even if you kick the bucket. But is it worth it? And how does it compare to regular life insurance? Let’s dive in and get the lowdown.
TL;DR:
- MPI pays off your mortgage if you die.
- It’s cheaper than term life insurance if you have health issues.
- Term life insurance offers more flexibility and can be used for other expenses.
So, what’s the deal with MPI?
Consider it as a particular kind of life insurance meant to pay off your mortgage balance. It’s similar to having a friend who covers for you when you’re not around. The catch? The death benefit decreases as you pay off your mortgage. Plus, your lender is the only one who gets the dough.
Now, let’s talk about term life insurance.
This bad boy is like a more versatile tool It provides a set amount of money to your beneficiaries (your fam, friends, or whoever you choose) when you die They can use it to pay off your mortgage, cover other debts, or just ball out. The best part? The death benefit stays the same throughout the policy term.
So. which one should you choose?
It depends on your situation, bruh. Term life insurance is generally the best option if you’re in good health and have other financial needs. However, MPI might be a better option if you have health concerns or want to ensure that your mortgage is paid off no matter what.
Here’s a quick breakdown to help you decide:
MPI:
- Pros:
- Cheaper if you have health issues
- No medical exam required
- Guarantees your mortgage gets paid off
- Cons:
- Limited flexibility
- Death benefit decreases over time
- Only your lender benefits
Term Life Insurance:
- Pros:
- More flexibility
- Death benefit stays the same
- Can be used for any purpose
- Cons:
- More expensive if you have health issues
- Medical exam required
Still confused? No worries, fam.
Talk to a financial advisor or life insurance agent. They can help you figure out which option is best for your situation. And remember, it’s always a good idea to shop around and compare quotes before you buy any insurance policy.
Peace out, and stay safe!
P.S. Here are some additional resources that you might find helpful:
- Policygenius: https://www.policygenius.com/life-insurance/mortgage-protection-life-insurance/
- Bankrate: https://www.bankrate.com/mortgages/mortgage-protection-insurance-vs-life-insurance/
P.P.S. Don’t forget to check out our table comparing the best mortgage protection insurance companies!
P.P.P.S. And if you’re looking for a life insurance quote, we can help you with that too! Just click here: [link to life insurance quote tool]
How We Make Money
The offers that appear on this site are from companies that compensate us. Unless our mortgage, home equity, and other home lending products are specifically prohibited by law, this compensation may have an impact on how and where products appear on this website, including, for example, the order in which they may appear within the listing categories. However, this payment has no bearing on the content we post or the user reviews you see here. We do not include the universe of companies or financial offers that may be available to you.
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Heres an explanation for . Bankrate logo.
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve upheld this reputation for more than 40 years by assisting people in making sense of the financial decision-making process and providing them with confidence regarding their next course of action.
Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. All of the content we publish is objective, accurate, and reliable because it is written by highly qualified professionals and edited by subject matter experts.
In order to give you peace of mind when making decisions as a buyer and homeowner, our mortgage reporters and editors concentrate on the topics that matter most to consumers: the newest rates, the greatest lenders, navigating the homebuying process, refinancing your mortgage, and more. Bankrate logo.
Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions.
We value your trust. Our goal is to give readers reliable, unbiased information, and we have established editorial standards to make sure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers.
Bankrate’s editorial team writes on behalf of YOU — the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. Thus, you can be sure that the information you’re reading, whether it’s an article or a review, is reliable and reputable. Bankrate logo.
MPI vs. life insurance cost
For an MPI policy, the monthly premium can be as low as $5 or as high as $100. By comparison, life insurance premiums vary widely based on the provider, policy and individual covered. Learn more:
Is It Worth Getting Mortgage Protection Insurance
FAQ
How much is mortgage protection insurance cost?
How much does mortgage insurance cost in case of death?
|
Age
|
Monthly Mortgage Insurance Premium
|
|
25
|
$11.77
|
|
30
|
$14.72
|
|
35
|
$20.90
|
|
40
|
$32.15
|
Is mortgage insurance worth the cost?
How long does mortgage protection insurance last?
Mortgage protection insurance coverage typically lasts from 10 to 40 years, matching the loan terms of the mortgage. Whereas life insurance pays out a lump sum of cash that can be applied to any expense, mortgage protection insurance is exclusively for paying off a mortgage.
How much does mortgage protection insurance cost?
How much a mortgage protection insurance policy can cost you depends on a few different factors. Insurance companies will examine the remaining balance on your mortgage loan and how much time is left in your loan term. The amount of your MPI can also depend on your age and the amount of coverage you want.
How much does mortgage insurance cost per month?
Monthly premiums could be as low as $5.50 per month or as much as $75 per month, depending on the insurance provider and the other factors previously listed. It’s important to shop around with at least three different mortgage protection insurance companies to find the best carrier with the best rates.
How much does mortgage protection insurance cost if a homeowner dies?
That means if the homeowner purchased the policy while there was a mortgage balance of $150,000 but died with a mortgage balance of $75,000, the mortgage protection insurance will only pay $75,000, even though the homeowner paid the same premiums for the life of the policy.