In Nevada, the cost of homeownership varies significantly, but even modest homes typically cost hundreds of thousands of dollars in most areas. For most people, the biggest investment they’ll ever make is in their homes. That kind of investment deserves protection, and your family deserves the peace of mind of having Nevada mortgage protection insurance.
What Is Mortgage Protection Insurance?
Most people wouldn’t guess it from the name, but mortgage protection insurance (MPI) is a type of life insurance policy. People take it out to protect their families in the unfortunate event that they pass away unexpectedly.
When the breadwinner of the family dies, those left behind already have to deal with massive emotional burdens. They shouldn’t have to worry about losing the family home due to an inability to pay the mortgage, as well.
That situation is just what MPI is designed to prevent.
All MPI policies cover mortgage payments for homeowners who pass away, but some also provide coverage for a limited period when homeowners become disabled. This gives families time to readjust and find new solutions to paying off the mortgage, or to reevaluate their living situations, as they see fit.
Some drawbacks of MPI are a lack of flexibility for the family, a higher cost than term life insurance, and shrinking coverage as mortgage balance declines. But these drawbacks are outweighed by the benefits.
Homeowners shouldn’t confuse MPI with PMI, or private mortgage insurance. While PMI is designed to protect lenders in the event that homeowners default on their loans, MPI protects their families. With PMI alone, the families of the deceased would still be on the hook for paying off the balance of the loan.
With MPI, as well, the family won’t have to worry about keeping up with monthly payments while they grieve.
The Benefits of MPI
Many homeowners are hesitant to take out MPI because they don’t want another monthly bill. What they’re not considering is that they may not always be there to find ways to cover monthly expenses for the family, and without MPI, it will be their loved ones who suffer financial misfortune instead.
Before writing off this insurance coverage option, Nevada residents should consider the following benefits.
Guaranteed Approval for MPI
With regular life insurance, policyholders must pass medical exams, submit to lab tests, and prove that they are in good health and work in safe professions. The same isn’t true for MPI. Even if you work a dangerous job or aren’t in perfect health, you’ll still be approved.
No Hassles for the Family
When an MPI policy kicks in, the insurance provider sends checks straight to the lender to cover the mortgage balance. Because of this, families won’t have to go through the extra hassle of dealing with the money.
Potential Disability Coverage
Some MPI policies have provisions for making a few payments when policyholders become disabled. This gives families time to figure out how to move forward.
The Drawbacks of MPI