Owning a home is a great achievement for many Canadians, but it also comes with financial responsibilities and potential risks. Mortgage Protection Plan (MPP) is a vital safeguard for homeowners, providing safety against unforeseen circumstances that could disrupt mortgage payments. In this article, the IK Financial team will explore what MPP entails, its different forms and advantages, and whether it's obligatory for Canadian homeowners.
What is MPP?
Mortgage Protection Plan (MPP) is a type of insurance product specifically designed to cover mortgage payments in case of the policyholder's death, disability, critical illness, or involuntary job loss. It acts as a financial shield, ensuring that mortgage obligations are met even in challenging situations, thereby protecting the homeowner's investment and family's financial security.
What Are Some MPP Advantages?
MPP commonly comes in two primary forms: Mortgage Life Insurance and Mortgage Disability Insurance.
- Mortgage Life Insurance: This type of MPP pays off the outstanding mortgage balance in the event of the policyholder's death, ensuring that the family can retain ownership of the home without the burden of mortgage payments.
- Mortgage Disability Insurance: Mortgage Disability Insurance steps in if the policyholder becomes disabled and unable to work. It covers mortgage payments during the disability period, providing financial relief until the policyholder can resume working or until the policy term expires.
Is MPP Mandatory or Not?
Unlike homeowner's insurance, which could be mandatory for some homebuyers in Canada, Mortgage Protection Plan is generally not required. However, some lenders and mortgage professionals may offer it as an option for borrowers to consider.
Whether to purchase MPP is a personal decision that depends on individual circumstances and risk tolerance. While it's not mandatory, in some circumstances, Mortgage Protection Insurance provides valuable protection and peace of mind for homeowners and their families, making it a worthwhile consideration for those looking to safeguard their home investment.
IK Financial Mortgage Team operates on behalf of Mortgage Edge. Lic#10680
