What is Mortgage Term Life Insurance?

What is Mortgage Term Life Insurance?

Mortgage Life Insurance

Mortgage loan term life insurance refers to the term life insurance in which the mortgage loan buyer himself or the person who has an insured interest in it takes the borrower as the insured and insures the insurer. This type of insurance is a kind of pure life insurance, but this life insurance is designed in close cooperation with the mortgage loan contract (for example, the term of the insurance contract is the same as the term of the mortgage contract, and the insured amount is can be increased as the outstanding loan amount decreases year by year. reduce).

 In this type of insurance, the borrower is the insured, the borrower or the person who has insurance interest with it is the policyholder, and the lender itself is not a related party to the insurance contract. It can be seen that this type of insurance is insurance purchased by the insured to prevent the death of the insured and is unable to repay the loan and the house is exercising the right to mortgage. It is an important means of personal family finance. For example, Someone is the breadwinner of a family and bought a house. In the unfortunate event of his death, his family could face homelessness. Because his family can’t repay the loan, the house he lives in will be mortgaged by the lender. This problem can be solved by purchasing term life insurance.

Elements of Mortgage Term Life Insurance

 1. Mortgage Term Life Insurance Coverage

 (1) Insured: Anyone who is over 18 years old and has full capacity for civil conduct can apply for this insurance for himself or his spouse or immediate family members who meet the insurance conditions; financial institutions that handle house purchase loans can also be insured. Insure principal insurance for their home loan borrowers. The written consent of the insured must be obtained at the time of application.

 (2) Insured: Anyone who is between the ages of 18 and 69, is in good health, can work or work normally, and has the conditions for a house purchase loan, who applies to a financial institution and obtains a house purchase loan, can be regarded as the insured.

 2. Mortgage Term Life Insurance Insurance Liability

 During the period of validity of the insurance liability stipulated in the insurance contract, the insurer shall bear the following insurance liabilities to the insured:

 (1) Death protection. If the insured dies due to illness or accidental injury, the insurer will pay the immediate insurance amount on the first loan repayment day after the accident (excluding the insured’s failure to comply with the purchase loan contract before the insured accident occurs). The overdue arrears arising from repayment) shall be paid to the beneficiary, and the insurance contract shall be terminated.

 (2) Total disability protection. If the insured is disabled due to illness or accidental injury, the insurer will pay the immediate insurance amount on the first loan repayment day after the accident (excluding the insured’s failure to comply with the purchase loan contract before the insured accident occurs). The overdue arrears arising from repayment) shall be paid to the beneficiary, and the insurance contract shall be terminated.

 (3) Exclusions : 

intentional killing or injury of the insured by the insured and the beneficiary; illegal, intentional crime or resisting arrest, intentional self-injury, drunkenness, fight by the insured; taking, ingesting or injecting drugs by the insured; The insured commits suicide within 2 years from the date of establishment or reinstatement of the insurance contract; the insured drives without a license, driving under the influence of alcohol, and drives a motor vehicle without a license; Declared dead by a court; war, military action, riot or armed rebellion, etc.

 3. Mortgage Term Life Insurance Coverage Term

 The insurance period is generally set from 1 to 30 years. The insurance period is the same as the loan period, and the insurance liability begins when the insurer agrees to underwrite and receives the first premium. and issues the insurance policy, and ends when the terminating insurance accident occurs.

 4. Mortgage Term Life Insurance Coverage and Premium

(1) The immediate insurance amount is limited to the loan balance agreed in the house purchase contract, the initial insurance amount is determined according to the underwriting results of the insurer, and the immediate insurance amount decreases year by year according to the repayment plan agreed in the insurance contract and the house purchase loan contract.

 (2) The insurance premium varies according to the age of the insured and the loan term when the insured is insured. The payment methods are single payment, 3-year payment, 5-year payment, 10-year payment, 15-year payment, annual payment, and monthly payment.

 5. Mortgage Term Life Insurance Beneficiary

 The first beneficiary of mortgage term life insurance is the financial institution that issues the home loan 

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By Michael Caine

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