A house is probably the biggest purchase an individual would make, essentially because of the amount of money invested. Not everyone can buy a house by paying the full cost upfront; on the contrary most of the houses are purchased through a mortgage loan. A Mortgage Insurance saves your family and the property in case you die before the whole mortgage has been paid. This policy will ensure that your family remains debt-free and lead a usual life after you are gone. Usually, along with a loan approval from a bank, you get a chance to apply for a Mortgage Insurance with the bank. However, this is not mandatory; you can decline for the insurance and still avail the loan.
The coverage amount for this type of insurance remains the same but the mortgage will obviously go down as you pay the dividends. This is why; people tend to choose Term Life plans. People who can’t get a Term Life plan usually go for a Mortgage Insurance since it doesn’t require any medical screening. So, people with life threatening medical conditions can also get mortgage insurance.
Usually the lending bank is enlisted as the beneficiary in a Mortgage Insurance but some companies now gives you the flexibility to nominate a dependent as a beneficiary. People who have recently bought a home and people who want to refinance their mortgage can use these products to avoid the risk of large mortgage debt.
An extensive research on the subject is recommended to everyone who wants to buy a new house or wants to insure the mortgage loan. You should consider the loan amount and your health in order make a good decision in choosing the perfect insurance plan for you.
These insurance products ensure a financial stability to your family after your death. Upon death, the insurer pays off the pending Mortgage amount to the bank in a lump-sum. Although the mortgage decreases and hence the Insurance cover value decreases with time but it still gets you a peace of mind. One of the biggest advantages is that these products are available with minimum writing, it is even available to people who can’t get a term life insurance due to poor health or some ongoing health issue.
AT A GLANCE:
Mortgage insurance also known as mortgage protection is offered by various companies in different forms .It ensures that if the lender dies, the entire unpaid amount will be paid in full as per the mortgage policy. This takes off a lot of burden from the family members of the beneficiary. Having a good insurance broker is important who can help choose the right mortgage insurance. A master policy which lays out the terms and conditions under insurance certificates is issued to the bank or other mortgage-holding entity. Also the coverage can be withdrawn or revoked if misinterpretation or fraud exits.