What is the difference between PMI and mortgage life insurance? PMI (Private Mortgage Insurance) protects your lender if you default on your loan. It is required when your down payment is less than 20% on a conventional mortgage. PMI pays the lender if you stop making payments — it does not benefit your family in any way and provides you with no death benefit. Mortgage life insurance (or mortgage protection life insurance) pays your family or lender if you die. The two products have nothing in common beyond the word “mortgage.” PMI is typically $30–$70/month and is canceled once your loan-to-value reaches 80%.