Many people confuse this policy for PMI (Private Mortgage Insurance). You are required to purchase this policy when you put less than 20% on a down payment, and it’s designed to reimburse the lender if you foreclose on the property. However, it’s not meant to protect you. Mortgage protection insurance is designed for your protection, as well as for your family. So, they don’t have to worry about paying for the home if something were to happen to you, and many of them have a “waiver of premium” provision that will suspend any payments while you’re unemployed or disabled.
You can also get a type of accident insurance that’s attached to these policies in the form of an Accidental Death and Disability provision, which will pay an additional amount if you die of an accident. You can also get a “common carrier” provision, which will pay even more if it happens on a vehicle being used for public transportation. Having this type of accident insurance can be helpful, and it doesn’t add much to the total cost of the policy. It can also give you an extra layer of protection which will ultimately benefit you and help your family in the event of a tragedy.
If you have a home, there’s a good chance that you’ve already received numerous offers from multiple companies, but you may be wondering if you really need it. Having this type of policy can give you that extra piece of mind, and it can protect you in certain events that may unexpectedly occur. No one plans to lose his or her job or have an accident, and no one plans to die. That’s why it’s important to prepare for the worse.