I'm afraid you are confusing MIP (FHA Mortgage Insurance Premium) with some other kind of insurance. MIP is in place to protect the Lender in the event a Homeowner with an FHA Insured Loan defaults. The MIP is in place as long as the loan is active. It does not cancel or payoff if the Homeowner dies.
The Home Insurance Specialists
Hope this answer helps.
Sharon Alters, CDPE, GRI
Short Sale Specialist ~ Distressed Properties