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What is Mortgage Insurance Mortgage insurance is an insurance policy that protects a mortgage lender or title holder in the event that the borrower defaults on payments, dies or is otherwise unable to meet the contractual obligations of the mortgage. Mortgage insurance can refer to private mortgage insurance (PMI), qualified mortgage insurance premium (MIP) insurance or mortgage title insurance. What these have in common is an obligation to make the lender or property holder whole in the event of specific cases of loss. Mortgage life insurance, on the other hand, which sounds similar, is designed to protect heirs if the borrower dies while owing mortgage payments. It may pay off either the lender or the heirs, depending on the terms of the policy. BREAKING DOWN Mortgage Insurance Mortgage insurance may come with a typical pay-as-you-go premium payment, or it may be capitalized into a lump-sum payment at the time of mortgage origination. For homeowners who are required to have PMI becau...

Life insurance is usually thought of as something for the spouse who is the breadwinner. If that person dies, then the life insurance benefit would help provide for the family. The mortgage may still get paid; the kids may still go to college. Life coverage is no less important for the spouse who stays at home, works part time, or is a secondary breadwinner. The death benefit, payable if the insured stay at home spouse dies, could help pay for childcare, housekeeping, meals, and other services your family can't do without. Life insurance is also important for the kids. Getting them covered at a young age may help ensure they have the coverage in the future. They can convert the coverage as adults, even if they later develop health problems that would otherwise make them uninsurable. With family life insurance whatever the future brings, your loved ones' financial security may be protected.