There has always been a debate on buying mortgage protection insurance. Some consider it good while others find it useless. But, it is true that most of us don't have much knowledge about mortgage protection insurance.

Mortgage insurance is of two types. Because with one you might not have a choice if you want to have it. Private mortgage insurance protects the lender if you default on your loan. If the down payment made by you is less than 20 percent of the total value of the property, you won't have a choice other than choosing a private mortgage insurance. But the things are totally different with mortgage life insurance.

Private Mortgage Insurance

A private mortgage insurance is requires in every circumstance where more than 80 percent of the total value of the house is under a mortgage loan. This type of insurance is meant to protect the lender. The total cost of a private mortgage insurance is mostly 0.5 percent of the total loan amount.

Mortgage Life Insurance

Mortgage life insurance protects you instead of protecting the lender. This insurance covers the total amount of mortgage if you die, obtain a disability or gets debilitating illness.

Experts say that in most of the cases, it is of no use to take a mortgage life insurance. There are little chances of your becoming unable to pay the mortgage amount. And if such things happen, your family or others in the household will definitely come out with other ways of paying the bills.

Disability Insurance

This type of insurance would help you to pay all the bills including your mortgage, if you become disable. You can pay an insurance premium to cover most of your expenses, which will cost you the same as you would pay to take care of the mortgage.