Benefits of life and health insurance when taking out a mortgage loan
Mortgage lending involves obtaining a large loan to buy an apartment. Therefore, banks seek to protect themselves as much as possible in the event that the borrower is unable to continue to pay the loan. To do this, they require the client to have mandatory life and health insurance, without which they do not approve the mortgage. Such a step on the part of the banks is not a violation of the law.
In addition, this insurance has many advantages. So, by fulfilling this requirement, a person does not follow the lead of financial organizations and insurance companies, but protects his own interests. Even if the bank does not oblige the borrower to insure their life and health, it is better to do so.
The benefits of insurance
The payment of a mortgage loan is a fairly serious event that lasts for several years. To repay the debt in a timely manner, you need to have a stable income. When the borrower is doing well, he has no problems paying the mortgage fees. However, it is impossible to exclude the occurrence of force majeure.
Sudden death, complete or partial loss of performance-these are the reasons that radically change your life. The family may find itself in a situation where, for objective reasons, it will not be able to pay the debt. In addition, there is a risk of losing an apartment taken on a mortgage. To initially protect yourself and your family from such consequences, the borrower needs to insure your life and health.
When applying for insurance, you must take into account a number of serious points: It is important that the amount of insurance compensation coincides with the balance of the mortgage debt. The beneficiary should be the bank that issued the loan. The policy must be issued to all owners of the apartment purchased with a mortgage. The validity period of the insurance must cover the entire period of the mortgage loan.
In the event of the borrower's death, the insurance company will reimburse the bank for 100% of the remaining debt. In case of disability, the amount of the insurance payment will be 50-75%. Payments for temporary health problems may correspond to the amount of monthly payments.
The presence of such insurance will allow you to pay the bank even in the event of adverse circumstances. This is a serious protection in case you find yourself in a difficult life situation. So approach the issue of insurance quite seriously.
View count: 968