Definition: The mortgage protection insurance (also called mortgage coverage or mortgage protection) is a type of financial product offered by banks, building societies, or other lenders to protect homeowners in the event of defaulting on their mortgages. Mortgage Protection Insurance (MPI) works by insuring your home loan against certain types of losses. Some of these losses can include: 1.

Losses due to property damage

: If your property is damaged or destroyed during the term of your mortgage, the insurance company pays for repairs and replacement costs. 2.

Losses due to theft or burglary

: If your home or personal belongings are stolen or burglarized, the insurance company pays a deductible that reduces the amount you need to pay in case of loss. 3.

Losses due to non-payment of interest or other fees

: The insurance covers up to 100% of any additional amounts you owe for your mortgage payments during the term of the policy. The coverage provided by a mortgage protection plan is designed to protect you from some types of potential losses, but not all types of losses can be covered. It's important to understand the limitations and exclusions of the policy, as well as your rights and responsibilities under it. Mortgage Protection Insurance works in conjunction with other financial products such as life insurance or auto insurance, which provide additional protection for you against some specific types of risks that might occur during the term of a mortgage. The goal is to create a comprehensive insurance coverage structure that protects both you and your lender from various possible losses associated with your home loan. Please note that the terms and conditions of your mortgage protection plan may vary, so it's important to carefully read the policy details before signing up for it.

mortgage protection insurance