Housing loan lenders will usually insist on borrower’s having a Mortgage Protection assurance policy as a form of collateral security.
A mortgage protection is a life assurance policy that will repay the balance of a loan on death during the loan term. This is to ensure that if a borrower dies then his/her dependants will not be forced out of their home because they are unable to continue making the loan repayments.
Mortgage protection cover comes in two forms,
a: where the borrower is covered by a Group or Block mortgage protection policy effected by the lender.
b: where the borrower has an individual mortgage protection policy and this is assigned to the lender.