If you don’t have answers to these questions or you’re thinking that private mortgage insurance is the answer, you need to look into mortgage protection insurance. Many people do not understand the difference between private mortgage insurance (PMI) and mortgage protection insurance and getting the two confused could cost you your home.
Private mortgage insurance will not protect your family. PMI is also known as lender’s mortgage insurance, and is issued by banks to protect themselves if you default on your mortgage. This means that if you default on your mortgage loan, the bank is guaranteed to receive payment, but your family could still lose their home. Banks usually require this coverage if the down payment you put down on your home is less than twenty percent. Many banks do not thoroughly explain private mortgage insurance, leading many people to believe that they would not lose their home if something happened to them; the bank’s priority is to get paid, not protect your family and your home.
Mortgage protection insurance is much different. This coverage is provided by insurance companies and ensures that your mortgage will be paid off if you should pass away. Your family is guaranteed to keep their home in the event of your death. Mortgage protection does not protect the bank, it protects your family. This is an important policy to have if your family wouldn’t be able to pay the mortgage bill without your income. Because this coverage does not protect the bank, they will not require this policy, so it’s important for you to get a policy on your own.
Mortgage disability insurance is another good policy to have if you’re concerned about your family’s future. This coverage pays your mortgage if you become unable to work due to illness or injury. This way, you won’t have to worry about your family’s finances if something happens to you.
It’s important for families to understand that private mortgage insurance will only protect the bank that loaned you the mortgage; it will not protect your family.
If you’re interested in protecting your family and your home, fill out the form to the right or give us a call. One of our certified insurance specialists will give you a free quote and help you find a policy that suits your budget and coverage needs.
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