Do You Need Life Insurance When You Get A Mortgage? 
While a good idea , it is not required by law to purchase a life insurance policy in order to get a mortgage . I assume what you are referring to is Mortgage Protection Insurance -LRB- MPI -RRB- , which would pay your beneficiary so that they could pay off your mortgage in the event of your death . This is not to be confused with Private Mortgage Insurance -LRB- PMI -RRB- which is required to protect the lender in case of foreclosure , and is a legitimate requirement for borrowers who can not put down over 19 % on a home . The Consumer Financial Protection Bureau announced a crackdown this month -LRB- April , 2013 -RRB- on mortgage insurers who give kickbacks to mortgage lenders in return for business . So do n't let your lender make you purchase mortgage insurance from a certain company in order to get a mortgage . If you do wish to protect your mortgage in the case of your death , buying a simple level Term policy is often the most cost effective solution . 