What is mortgage protection insurance?

Mortgage protection insurance, or MPI, covers your monthly mortgage payments — and only your monthly mortgage payments — if you die. It's meant to protect your family from having to sell or lose their home due to loss of your income.
Important side note: Mortgage protection insurance is different from private mortgage insurance (PMI), which protects your lender and is something you have to pay if you put less than 20% down on a home. (Mortgage protection insurance, conversely, is a policy you opt to buy.) PMI basically insures your mortgage lender won't lose all their money if your stop making payments on the loan.

What is term life insurance?

Broadly, term life insurance is a type of life insurance that covers you for a set period of time — as opposed to your whole life. That's permanent or whole life insurance.

Mortgage protection insurance vs. term life insurance

Given mortgage protection insurance is a type of term life insurance, the policies fundamentally operate the same way. You buy a policy for a set period of time, make monthly payments (premiums), and, in the event of the death, have a death benefit paid out to your beneficiary.
But, beyond that, there are a few big differences between MPI and traditional term life. The first one we mentioned already: Mortgage protection insurance only covers your mortgage, while regular term life insurance covers all of your expenses (up to your coverage limits, natch'.) What's preventing your family from using the policy's death benefit for other things, you ask? Simple: That money gets paid directly to your lender. Under a traditional term life policy, you get to name a beneficiary.
Also different: Mortgage insurance is tied to the balance on your mortgage — meaning the death benefit decreases in tandem, even though there's a good chance your premiums will remain the same. So, yeah, mortgage protection insurance is usually more expensive than standard term life. That's also due to the fact that applicants are exempt from having to take a paramedical exam. MPI is what's known as a guaranteed approval policy, meaning you can qualify without having to go through standard underwriting (read: medical exam).