Mortgage default or loan insurance protects the lender if the mortgage holder defaults on payments and is required if you are paying less than a 20% down payment on your home. This is not the same as mortgage life insurance, which protects your estate by paying off the mortgage upon death of the policy holder.
Mortgage Life Insurance pays the balance of the mortgage, protecting your estate. It is important to know if you have mortgage life insurance, mortgage default insurance or mortgage loan insurance. Mortgage life insurance is to protect your estate by paying out the outstanding mortgage if the policyholder dies; whereas mortgage default insurance and mortgage loan insurance does not offer this protection.
Mortgage Insurance Key Points:
- Protection for one of your largest life investments
- Safeguard your family’s lifestyle
- Pays off or reduces your mortgage balance