Rovan Singh is a very successful entrepreneur and seasoned real estate developer who is prolific in the field. He also founded his family’s business, which functions internationally and reaches a wide geographical range of people, particularly in Italy and Canada. He has a proven record of determination and skill and continues to improve his craft through education, research and a hands-on approach. Rovan will undoubtedly continue to have a successful career and emerge as a leading real estate investor in his area and beyond. Below are some words from him about the benefits of mortgage protection insurance:
Buying a home is perhaps one of the scariest ventures a person can undertake. The sheer amount of debt associated with a mortgage, along with their particularly lengthy terms, is enough to force many future homeowners to reconsider their dreams. Fortunately, there is a way to reduce the fear factor associated with mortgages: mortgage protection insurance or MPI.
Before we get too much further, I’d like to take a moment to stress the importance of distinguishing between private mortgage insurance (PMI) and mortgage protection insurance (MPI). PMI is legally required to be purchased by any mortgagee neglecting to provide a 20% down payment on their home loan. MPI is not legally required but does provide several benefits to the policyholder that PMI cannot provide. Here are three (3) reasons mortgage protection insurance is worth the investment.
Death and Disability Coverage
Death and Disability coverage is perhaps the most obvious benefit of mortgage protection insurance. Simply stated, it covers your mortgage if you die unexpectedly. Mortgage protection insurance is very similar to life insurance in that the benefits are paid out in the event of an untimely death of the policyholder. It is different, however, in that the benefits are paid out directly to your mortgage company as opposed to a named beneficiary of your choosing.
Although not as common, some MPI plans are now coming equipped with disability clauses. These clauses allow your policy to pay out benefits if you are alive but unable to work. Each plan is different, but most modern plans limit this particular benefit to a specific amount of time and require a waiting period before paying out benefits without the death of a policyholder.
MPI is specifically designed to pay out the total amount of your original mortgage regardless of your remaining balance. This means that as long as you keep up with your payments and don’t pass away the day after signing, you are likely to benefit from a surplus of funds. If your original mortgage was $100,000 for example, and you paid off $20,000 prior to your death, the policy will stay pay out $100,000.
Individuals in poor health may have the most to gain from mortgage protection insurance. While life insurance is typically priced based on policyholder health, age, occupation, and risk factors, MPI normally operates on a “guaranteed acceptance” basis meaning there are little to no questions asked in order to prevent the policy from being issued. This is particularly beneficial for potential homeowners that smoke, are terminally ill, or work dangerous jobs like roofing.