COVERAGE BASICS
Mortgage protection vs. PMI: what’s the difference?
Mortgage protection life insurance can provide a death benefit that helps your beneficiaries manage a mortgage. Private mortgage insurance (PMI) protects the lender if a borrower defaults. They serve different purposes.
Who receives the benefit?
With life insurance, the policy’s beneficiary designation and terms determine who receives a death benefit. PMI protects the lender. Confirm the beneficiary and benefit structure of any policy you consider.
Does mortgage protection pay the lender directly?
It depends on the policy and any assignments. Ask your agent to explain who receives the money, whether the benefit changes over time and whether your family can use it for other expenses.
What should I compare?
Review the premium, coverage term, benefit amount, exclusions and eligibility. Ask what happens if you refinance, move or pay off your mortgage.