How much of the mortgage is typically covered by a MPPI policy?

A Mortgage Payment Protection Insurance (MPPI) policy is designed to cover the borrower's mortgage repayments in the event of unforeseen circumstances such as loss of income due to illness, accident, or unemployment. Such a policy typically covers 100% of the mortgage repayments, allowing the insured to maintain their monthly commitments without the fear of losing their home.

The correct answer being 100% stems from the objective of the insurance product, which aims to provide comprehensive coverage that directly correlates to the mortgage obligations of the policyholder. Therefore, in the event of a valid claim, the policy would cover the full amount of the mortgage payments for the agreed-upon duration, typically for a set period such as 12 months, depending on the policy terms.

The other percentages such as 75%, 125%, or 150% do not align with the standard offerings of MPPI policies, which are designed to cover the entire mortgage payment amount to ensure financial security without providing excess coverage or a lesser amount that would leave borrowers liable for shortfalls. This comprehensive nature is vital for individuals seeking peace of mind while ensuring they can meet their mortgage obligations during difficult times.