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What exactly do you mean by Equity Protection? Isn't this just Critical Period Protection or a Final Expense Policy?

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🔍 Equity Protection Policy? What Is It?:

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If the borrower (homeowner) dies, the insurance policy pays an arbitrary amount of monthly mortgage payments (usually 12 mos) directly to the lender or to the beneficiary to help cover the mortgage. With certain policies there can be an "Accidental Death" rider  which will double the amount of coverage in the event of a tragic accident leading to a passing. This can be part of:

• Mortgage Protection Insurance (MPI)

• Life Insurance/IUL

• Critical Period Protection

• Final Expense Solution

 

✅ Key Benefits:

1. Immediate Relief for Family: Your loved ones won't have to scramble to cover the mortgage right after your death. It gives them breathing room while they figure out longer-term plans.

2. Prevents Foreclosure: Helps avoid missed payments and the risk of losing the home during a vulnerable time.

3. Time to Settle the Estate: The 12-month buffer allows your estate to go through probate or for the home to be sold without urgency.

4. Supplement to Life Insurance: Even if you have a life insurance policy, this feature ensures the mortgage is addressed specifically, so the life insurance payout can be used for other needs.

 

📌 Example Scenario:

If your monthly mortgage payment is $2,000 and you pass away, your beneficiary would receive $24,000 to cover the next 12 months of payments while they create a new normal, refinance or put the home on the market with a proper amount of time to receive the full equity of the home.