Depends on your policy. They are all different and can have exclusions for many different reasons. Check with your agent or it should be written in your policy.
If the law requires you to have insurance (Auto Liability) or someone else does (your mortgage company, your auto lender) you could be in hot water if you don't have it. Otherwise, you don't have to have insurance.
Mortgage protection services are a great way to protect the mortgage taker from rising interest rates. Especially people with large mortgage loans might be interested in protection as the interest rates play large part of the payments.
One can obtain a mortgage insurance policy from many different companies. Some examples of companies that offer mortgage insurance policies include Prudential and United Life Direct.
There are many things that would make a mortgage insurance premium increase. Mortgage insurance is used when someone dies and pays money so that the mortgage will be paid. Smoking or participating in dangerous activities will increase the premiums.
That is typically one of the contingencies that mortgage insurance will pay. The other tends to be when someone loses their job.
Insurance can be protection on your house, car, pet, ect. Assurance is like telling someone they can do it or they'll be ok.
I think you are asking two different questions here. (1) Mortgage Insurance insures your life in order to pay off your mortgage if you die. (2) Title Insurance ensures that the company guarantees and will defend your title and deed to your house that it will stand a test in court if someone should ever challenge your ownership of the property. I do NOT recommend getting mortgage insurance. You could just as easily buy term life insurance for less money to do the same thing. I DO recommend getting title inusrance.
Mortgage life insurance guarantees that the borrower's mortgage will be paid off, even if they die before paying the last bill. In theory, this protects the borrower's family from inheriting their debt. However, a mortgage life insurance policy decreases in value over time, in obvious contrast to standard life insurance, making it less useful for someone who expects to continue living for some time. Hence, it is considered by most to be a bad investment.
You don't HAVE to cover your property with homeowners insurance once your home has not mortgage but you could lose everything if you had a fire or if someone was injured on your property. Some HOA's require some type of insurance on every property regardless of mortgage. Its not a wise decision to drop coverage.
Her
"PMI or (Pecentage of Mortgage), insurace, it primarily for the lender's peace of mind. It is normally demanded of borrowers that will put less than 20% of their home's value down. As they pay into the mortgage, they will no longer need it for the contract."
This question would be better answered by someone in the finance/mortgage industry. As far as the first part of the question is concerned, the first mortgage wouldn't be paid off unless the homeowner had made arrangements to have it paid off in the event of their death. A life insurance or mortgage protection insurance policy would be necessary to do this. As far as the second part of the question, I have no idea who is or is not responsible for paying that mortgage. I would think that the home would be sold, the 2nd mortgage paid, and the remainder of the money would go to the beneficiaries of the estate. You should also check to see if the homeowner had a standard mortgage, or if they were using a reverse mortgage. Reverse mortgages are becoming increasingly common among retired persons.