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One of the biggest benefits of Mortgage Protection Policies is that they allow you to name your own beneficiaries when you apply for the policy. Mortgage Protection Policies do not require you to name the mortgage lender as your beneficiary, which leaves you a lot of license to name the people that you actually want to receive the death benefit as your beneficiaries.
It's important that you name only those people who have an insurable interest as your beneficiaries, at least initially. This means you must name those individuals who will experience a financial or emotional loss if you should pass away. This generally means direct family members. Generally, close family friends or distant relatives are not seen as having an insurable interest, but you can send a letter to the underwriter along with your application explaining any unique circumstances that should be considered. Once your policy is approved, you can generally change the beneficiary of your Mortgage Protection Policies to any individual(s) you like, whether they have an insurable interest or not.