With the economy in shambles these past five years, it’s no wonder that much of the chatter around middle class tables in the US revolves around protecting their assets.
There are many ways to protect assets — if you’re in the top 1%, you protect assets by putting them in trusts and offshore accounts.
If you’re in the bottom 1%, you protect assets by hiding them in the fake shaving can when the wrong guests come over for dinner.
If you’re in the middle, you protect your assets with insurance. Car insurance, homeowner’s or renter’s insurance, life insurance, health insurance, and so forth are all designed to allow you to spend a small amount of money to protect something much more valuable. There are also thousands of other more obscure kinds of insurance designed to protect smaller or weirder kinds of assets. One of those is called Mortgage Payment Protection Insurance (MPPI).
MPPI kicks in whenever you become too ill to work, lose your job, die, or otherwise cannot pay your mortgage through no fault of your own. Depending on the specifics of your MPPI contract, it will probably offer some number of months of protection for sickness/injury, a different pool of months for involuntary unemployment, and (most often) will pay off your mortgage altogether if you pass away. Again, details vary dramatically from one company’s policies to another, so you’ll have to talk to each agent about how his or her company’s policies work.
Is MPPI worth the cost? That’s not a question with a strict mathematical answer. It’s insurance, and insurance companies have to make money to stay in business, so of course they charge more in monthly premiums than they have to pay out — but of course, if you actually need the insurance, it pays for itself in just a few months.
In today’s shaky economy, it pays to spend a little extra each month ensuring that your family’s biggest (and most important) asset remains safe. Mortgage Payment Protection Insurance (alongside decent homeowner’s insurance and so forth) is well worth the cost to simply know that, if something dire occurs, you won’t lose your home to foreclosure — your family will be safe.
About the Author:
Richard Simon is a residential mortgage expert and co-founder of Realty AZ Central. Realty AZ Central is a Phoenix Arizona based real estate marketplace offering a host of home buyer and seller resources including home selling tips, mortgage lender referrals, and a local real estate agent network.