What is the purpose of mortgage protection insurance?

Mortgage protection insurance is specifically designed to cover monthly mortgage payments in the event that the policyholder is unable to work due to ill health or passes away. This insurance ensures that the mortgage remains paid during such challenging circumstances, thereby protecting the homeowner's family and preventing the possibility of losing their home. In essence, it serves as a financial safety net, assuring that the mortgage obligations are met even under unforeseen and difficult situations.

The purpose of the other options does not align with the function of mortgage protection insurance. For instance, insuring the lender against default would pertain to a different type of insurance that does not assist the homeowner directly. Similarly, protection against property damage pertains to home insurance, which covers physical damage to the property itself. Lastly, building equity in property investments refers to the financial growth aspect of owning property rather than providing support for mortgage payments. Thus, the true purpose of mortgage protection insurance is clearly reflected in the correct choice.