Hi PI
Your loan will remain insured usually for the term of the loan, sometimes for only a fixed period.
The LMI provider has NO relationship with your loan and you.
LMI will protect the lender where they suffer a loss due to a default by you AND the property sold does not cover the outstanding loan and costs.
Note just because your place is now valued at 80 % of the loan, doesn not mean the insurer may never have to pay out.
If you go belly up and the market goes to custard, then a fire sale may not cover the money owed (incl added default interest and recovery costs).
This is one of the primary reasons why LMI refunds on reduced LVRs only are uncommon.
Ta
rolf