Mortgage Protection Policy
This is equally a Term assurance cover, devoid of investment element. Mortgage protection is usually issued to protect an Organization from losing money loaned out to its customers or employees, which is not repaid before the demise of the borrower.
Features of the Plan
- The policy is issued on the life of the borrower i.e. mortgagor while the organization/mortgagees the beneficiary.
- The Sum Assured is equal to the amount of the loan
- Duration of the life policy should be same as the repayment period of the loan
- Premium is calculated using the Age of the Borrower and the Rate of interest at which the loan is given
- The sum assured is issued on reducing term basis
- If and when death occurs, before the expiry of the Policy, the outstanding the balance of the loan becomes payable under the life policy.
Benefits
- The policy protects the Lender from forfeiting any outstanding balance on the loan, in the event of the death of the Borrower.
- It also protects the Dependents from losing the property bought with the a mortgage loan in the event the of the death of the Borrower.
- The policy guarantees security and peace of mind to both the Lender and the Borrower respectively.