The term mortgage is quite familiar to you. People need loans for various purpose. When the loan amount is too high, the loan providing company asks for a guarantee. If the borrower has some property, he can keep it as a mortgage. In exchange he will get a sum from the loan providing company. Now, mortgage insurance is also available. This is a link with the life insurance where the insurance company will pay off the mortgage even if you die. Thus, your reputation won’t be disrupted. The tenure of the mortgage insurance will be the same as that of mortgage.
Types of mortgage insurance
Personal mortgage insurance
Basically, you will find two types of mortgage insurance plans. One is the personal mortgage insurance where as other one is bank mortgage insurance. Under the personal mortgage insurance, the policy holder is the owner. Here you get the coverage guarantee. You can provide the beneficiary name as per your choice. As a result, you can change it easily. There will be no disruption with the insurance even if you change the mortgage. The insurance cannot be more than the amount of mortgage.
Bank mortgage insurance
Another type of mortgage insurance is known as bank mortgage insurance. Here also the lender is the beneficiary. Here the bank takes all the ownership. The party has no right on it. Once the mortgage ends, the insurance also ends. The coverage has a decreasing trend. It means, it decreases the coverage as the time passes. As soon as the group experience changes, the premium for this can also change.
Today, most of the individuals and firms go for this mortgage insurance. There is a lower risk of the loan repayment. If the insured dies in the middle of the term, the insurance company will pay the rest loan amount.