Mortgage Protection Insurance (MPI), often confused with Private Mortgage Insurance (PMI), is a specialized life insurance policy designed to pay off your mortgage balance in the event of your death. Unlike PMI, which protects the lender, MPI protects your family and your home equity.
The MPI Insurance Rate Calculator above helps homeowners estimate the monthly cost of securing a policy. Rates are primarily determined by your age, the remaining balance of your mortgage, your health status, and lifestyle factors such as tobacco use.
Key Distinction: MPI pays the benefit to the lender to clear the debt, whereas standard Term Life Insurance pays the benefit directly to your beneficiaries.
Factors Influencing Your MPI Premium
Age: Premiums increase significantly as you age. Securing a policy while you are younger locks in lower rates.
Coverage Amount: The rate is directly proportional to your mortgage balance. As you pay down your mortgage, you may be able to adjust coverage, though many MPI policies are "level premium" for a set term.
Tobacco Use: Smokers typically pay 2 to 3 times more for insurance coverage due to higher health risks.
Policy Scope: Adding "Living Benefits" such as Disability Riders (which pay the mortgage if you are injured and cannot work) will increase the monthly premium.
How is MPI Calculated?
Insurers use actuarial tables to determine risk. The formula generally follows a structure of (Coverage Amount / 1000) × Rate Class Factor. The Rate Class Factor is derived from your age, gender, and health. For example, a 30-year-old non-smoking female in excellent health will have a significantly lower Rate Class Factor than a 50-year-old male smoker.
Is MPI Required?
No, Mortgage Protection Insurance is voluntary. It is different from PMI (Private Mortgage Insurance), which is often mandatory for loans with a down payment of less than 20%. MPI is a personal financial safety net to ensure your family can remain in their home without the burden of mortgage payments if the primary earner passes away.
function calculateMPI() {
// Get inputs
var coverage = parseFloat(document.getElementById('coverageAmount').value);
var age = parseInt(document.getElementById('applicantAge').value);
var gender = document.getElementById('genderSelect').value;
var tobacco = document.getElementById('tobaccoUse').value;
var type = document.getElementById('policyType').value;
var health = document.getElementById('healthRating').value;
// Validation
if (isNaN(coverage) || coverage <= 0) {
alert("Please enter a valid coverage amount (Remaining Mortgage Balance).");
return;
}
if (isNaN(age) || age 75) {
alert("Please enter a valid age between 18 and 75.");
return;
}
// Logic: Base Rate Calculation per $1000 of coverage
// Starting base rate for an 18 year old
var baseRatePer1000 = 0.15; // $0.15 per $1000/mo base
// Age Multiplier: Compounding increase per year of age
// Risk increases exponentially with age
var ageFactor = Math.pow(1.065, (age – 18));
// Gender Multiplier (Statistical mortality tables usually price males higher)
var genderMultiplier = (gender === 'male') ? 1.25 : 1.0;
// Tobacco Multiplier (Major factor)
var tobaccoMultiplier = (tobacco === 'yes') ? 2.8 : 1.0;
// Health Class Multiplier
var healthMultiplier = 1.0;
if (health === 'standard') { healthMultiplier = 1.35; }
if (health === 'rated') { healthMultiplier = 1.85; }
// Policy Type Multiplier (Disability rider adds cost)
var typeMultiplier = (type === 'plus') ? 1.45 : 1.0;
// Calculate Final Rate per $1000
var finalRatePer1000 = baseRatePer1000 * ageFactor * genderMultiplier * tobaccoMultiplier * healthMultiplier * typeMultiplier;
// Calculate Monthly Premium
var monthlyPremium = (coverage / 1000) * finalRatePer1000;
// Rounding
monthlyPremium = Math.round(monthlyPremium * 100) / 100;
var annualPremium = Math.round(monthlyPremium * 12 * 100) / 100;
// Update UI
document.getElementById('monthlyResult').innerText = "$" + monthlyPremium.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('annualResult').innerText = "approx. $" + annualPremium.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2}) + " per year";
// Update Breakdown
document.getElementById('riskFactor').innerText = health.charAt(0).toUpperCase() + health.slice(1);
var surchargeText = "0%";
if(tobacco === 'yes') surchargeText = "+180%";
document.getElementById('tobaccoSurcharge').innerText = surchargeText;
document.getElementById('ratePerThousand').innerText = "$" + finalRatePer1000.toFixed(2);
// Show Result Box
document.getElementById('resultBox').style.display = "block";
}