Home Loan Security Life Insurance Coverage (MPI) is created to cover your mortgage payments in case of a catastrophic life event. Policies can differ, however MPI usually covers your home mortgage payments if you are handicapped or lose your job, and will pay off the mortgage if you die.
Note: Because of the close acronyms, people sometimes confuse MPI with PMI (Personal Mortgage Insurance), which is insurance coverage that pays the bank in case of your default or foreclosure. They are entirely unassociated.
Special needs and job-loss MPI protection is limited to a specific amount of time (usually 1-2 years) and generally covers your monthly payments (both primary and interest elements). Other home-related expenses such as taxes and property owner association fees are not included.
The death benefit is fairly straightforward ¬– in case of your death, the insurance company pays off your home mortgage in full, leaving your house to your beneficiaries. Policy terms are typically for 15 or 30 y.
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