Purchasing a home can be an exciting experience. Whether the buyer is transitioning from renting or just starting out in the world, it’s a time of new beginnings and upcoming opportunities. For this reason, Arizona mortgage protection insurance is worth considering.
Being a homeowner in Arizona comes with a great deal of freedom and the security of knowing you’re paying for something that will ultimately be yours as opposed to always belonging to someone else.
What If Something Goes Wrong?
That being said, becoming a homeowner can also include its fair share of uncertainty. What happens if things take a turn for the worse and you can no longer make those monthly mortgage payments? What becomes of your family if its main breadwinner falls ill or meets with an untimely death?
If only there were some type of protection for Arizona homeowners to fall back on if needed. Fortunately, there is. It’s called Arizona mortgage protection insurance. This coverage gives people extra peace of mind in knowing their homes and families are protected in the event of an unexpected occurrence.
What Is Mortgage Protection Insurance?
Mortgage protection insurance, or MPI, is a special type of coverage that pays off a policyholder’s mortgage if he or she passes away. It goes beyond life and homeowner’s insurance to provide added assurance. Should the worst come to pass, it’ll pay the remaining balance of your mortgage, so your family won’t have to worry about losing their home.
How Does Mortgage Protection Insurance Work in Arizona?
MPI works a bit like other versions of insurance coverage in that it provides a payout if the policyholder passes away.
The difference here is the way the payout takes place. Rather than sending your beneficiaries a check, the coverage provider automatically sends the payout to the mortgage company.
As noted, the payout covers the entire remaining balance of the mortgage loan. That includes interest.
Some MPI policies also make allowances for debilitating injuries or illnesses. In those cases, the policy would cover a specified number of monthly mortgage payments if you were unable to work.
Not all illnesses and injuries are covered, though. At the same time, the payouts in this situation wouldn’t cover the entire mortgage balance.
Still, it would give you time to recover or allow your family extra time to plan for future mortgage payments.
How Much Does MPI Cost and How Much Will It Pay Out?
Various mortgage protection insurance policies are available in Arizona. Their cost can range from less than $20 per month to over $500 per month depending on certain factors. Those might include the remaining balance of the mortgage you’re looking to protect, your age, and existing medical conditions to list a few.
While age and medical conditions won’t render you ineligible for MPI, they could affect your monthly premiums.
As far as the payouts go, policies are designed to cover all types of homes. Whether your mortgage balance is less than $100,000 or more than $1 million, there’s a policy available.
Of course, the higher the mortgage loan is, the higher the MPI premiums will be. As many policyholders are quick to point out, the security that comes with knowing your mortgage will be covered for your family if something happens to you is well worth the cost of monthly premiums.