What is the difference between Mortgage Protection Insurance and PMI? This is a frequently asked question which we will take a look at to tell you the difference between the two forms of insurance. We will also discuss the benefits and options that are available to you if you don’t have either form of insurance. Mortgage protection insurance can be an important part of one’s decision when he or she passes away. A form of security for your loved ones.

PMI or Private mortgage insurance protects the lender if you can’t or do not make your mortgage payments.  This type of insurance is normally required if the loan too value of the house is more than 80%.  This is something that is required by the lender if the mortgage falls into this category.  After a period of time the home owner can have the PMI taken off and thus save themselves some money.

Mortgage Protection Insurance protects the home owner.  This form of insurance is much like term life insurance in which the mortgage is paid in full in case of a death of one of the homeowners that the mortgage is in.  This takes the burden off of the surviving relatives or friends that the home will be paid off and will be dealt with.  This can be very helpful in a bad situation.  Many times in an accidental death or death from old age the grieving spouse needs time to mourn and having a mortgage to pay can put a lot more stress on the individual that is already going through a lot.  Mortgage protection insurance is a good thing to have to make sure that your children and or spouse have one they need to continue on.

Make sure that you understand the difference between the two forms of insurance.  Many people do not know and automatically believe that they will be covered by PMI.  Again, PMI protects the lender and not you.  Make sure that if you decide to have insurance you get Mortgage Protection Insurance.