Everyone wants to know that their family will be able to cover their expenses if they were to pass away. One of the biggest concerns for most men and women is their family’s mortgage loan. No one wants to think about their family facing foreclosure after they pass, which leads many people to buy mortgage protection insurance (MPI). But what exactly is the difference between an MPI policy and a life insurance policy?
MPI is a type of insurance that covers your mortgage payments after you die. MPI policies list your mortgage lending company, not your family, as the beneficiary. This means that if you die during your policy’s term, the money goes directly to your lender to pay off your loan. You cannot use the money from an MPI payout for anything other than your mortgage.
Life insurance policies give your family more freedom when it comes to using your benefit. Like MPI, life insurance in Philadelphia, PA and beyond awards your family a lump-sum payment if you die during your policy term. However, with a life insurance policy, the money goes to your family. Your family can then use the funds for anything they wish, including mortgage payments, funeral expenses and everyday living expenses.
Many insurance experts recommend life insurance policies over MPI policies because they give your family more freedom to choose how to spend the benefit. Term life insurance policies are also typically more affordable than MPI policies as well, which is beneficial for families living on a limited income.
If you’re considering buying life insurance in Chester County, PA or another part of the Keystone State, know that you don’t need to choose a policy alone. At the Bachmann-Zeitlin Insurance Agency, we pride ourselves on helping you find the policy that’s right for your unique situation. Give us a call today at 267-288-5193 to learn more and get started.