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Sometimes, you just have to ask yourself the hard questions. Then you can figure out how to protect yourself, your family and your home. For instance, what would happen if your family’s primary breadwinner became disabled, came down with a serious illness or died? Could you still make the monthly mortgage payment? Do you have a financial back-up plan, such as mortgage payment protection insurance?
Don’t feel alone. Many people don’t have a plan or an insurance that could help them out in these situations. In the past, life insurance was the choice to help a family out in case mom or dad died.
Check your home buying eligibility. Start here (Nov 8th, 2026)
What is Mortgage Payment Protection Insurance (MPPI)?
There is also a less-heard of option in insurance called Mortgage Payment Protection Insurance (MPPI) or Mortgage Protection Insurance (MPI). Many people confuse that with Private Mortgage Insurance (PMI). They are totally different things.
You pay PMI each month along with your mortgage payment. It protects your lender in case you default on the loan. You pay it on a conventional loan when you put down less than 20 percent.
Etti Baranoff is an emeritus professor of insurance, risk management and finance at Virginia Commonwealth University, Richmond. She describes MPPI and MPI as a life insurance policy equal to the amount of your mortgage. You can add many riders and options to the insurance. But its purpose is to help a family stay in their home and have the mortgage paid after a hardship. That could be a terminal or long-term illness, a layoff from a job, disability or death.
“The insurance industry needs to give people a peace of mind. And sometimes, when that fear of ‘what would you do if something happens to you’ is put right in front of your face, you don’t look at the big picture,” she says. “People start buying insurance over their cell phone without really knowing what they are buying or what it really covers.”
Baranoff warns people to take a hard look at the fine print of any insurance they buy. That includes mortgage protection insurance.
“For instance, maybe you need to compare and look into disability insurance instead. It not only pays for your mortgage, but you also get money to help feed your family and other bills,” she says. Your mortgage is only one of your bills, and the others add up, she notes. “And how will you feed your family if you are disabled?”
Advantages of mortgage payment protection insurance
Paivi Kaufman was president of Mortgage Protection & Insurance Services Inc. in Fort Lauderdale, Florida, at the time of the interview. She has seen way too many homeowners who have a mortgage but no protection at all.
Kaufman recalls one woman she met. “Her mom died. The family didn’t have enough money to even pay for the funeral. They had to borrow money for that. The dad could no longer live in the house because no one could come up with enough money for the mortgage to keep him there,” she says.
There are a lot of sad stories. But Kaufman has been in the insurance business a long time. She has seen how being prepared can truly give families a second chance. Mortgage payment protection insurance is one of those second chances, she says.
One of the advantages of this type of insurance is that many plans do not require medical underwriting. Some insurers offer coverage without a medical exam, though terms vary by insurer. Kaufman says that makes it easier and faster to qualify.
That’s good news for people who can’t get other life or disability insurance because of health issues or high-risk jobs.
“One of the great things about this insurance is the money back option on some of the plans from some of the companies. You get your premium returned to you in full at the end of the policy,” Kaufman says.
She explained what this could mean for someone financially. Refund plans usually cost more than standard coverage, and conditions apply. The tax treatment of a refund depends on the policy, so ask the insurer and a tax adviser.
Premiums vary with your age, loan size and smoking status
“The premium price depends on a lot of factors such as how much the mortgage is and the age of the person getting the policy,” she says. “One plan doesn’t fit all.”
For instance, someone in their 60s can pay much more than someone in their 20s. A smoker usually pays more than a non-smoker.
“No one knows when they will die, or we all die one day. We also don’t know when a heart attack, stroke or terminal illness will happen,” Kaufman says. “The only thing you can plan for is to have some type of financial protection for you and your family.”
Check your home buying eligibility. Start here (Nov 8th, 2026)
