Coverage that helps your family pay off the mortgage if you die.
Mortgage protection insurance is coverage designed to pay off your remaining mortgage balance if you die. Unlike standard life insurance — which pays a cash benefit to your family — many mortgage protection policies pay the lender directly. Your family keeps the house, but they don't receive any additional funds.
This type of insurance is often marketed directly to new homeowners through mail offers from their mortgage lender. While the convenience is appealing, it's important to compare mortgage protection with a standard term life policy — which usually offers more flexibility at a similar or lower cost.
Probably not. If your existing life insurance coverage is sufficient to pay off the mortgage AND cover living expenses, a separate mortgage protection policy is redundant.
No. PMI (private mortgage insurance) protects the lender if you default on payments — it has nothing to do with your death. You cannot name beneficiaries and there is no payout to your family.