Mortgage Insurance Quote
How a Mortgage INsurance Works
Single Life Mortgage Insurance
A Single Life Mortgage Insurance policy is usually a decreasing term insurance that covers the mortgage liability of the insured. In a Single Life Mortgage Insurance policy, only one person is insured. If the mortgage is shared by more than one person, the other person can take up another Single Life Mortgage Insurance policy as Mortgage Insurance are quite competitive today. You may also wish to compare if a Joint-Life Mortgage Insurance or a Single Life Mortgage Insurance is better for you.
You will need to specify the loan interests when asking for a Single Life Mortgage Insurance policy. The interests should reflect the loan interests that the owner takes with his/her bank.
As with a decreasing term insurance, the coverage will decrease according to the loan interests specified.
Some insurer requires the insured to provide the mortgage loan agreement in order to apply for coverage.
The premiums of the policy usually ends a few years before the coverage ends as with a decreasing term insurance to discourage the insured from lapsing the policy as the coverage drop towards the end of the policy term.
Premiums cost much lesser than a level term insurance.
Usually there is no cash value and when the term expires, there will be no refund just as a Term Insurance.
In the event of the claim of the insured, some mortgage insurance policies allows the coverage to be used to pay off the mortgage to the lender or be used by the beneficiaries for other purposes.
Please note that sometimes, for other type of mortgage insurance policies, coverage will be paid directly to the lender to offset the mortgage loan.
Joint Life Mortgage INsurance
A Joint-Life Mortgage Insurance is a mortgage insurance that provides insurance coverage on the life of two person (usually a couple) on a single insurance policy. A Joint-Life Mortgage Insurance is also known as first to die policy as the coverage is paid out on the death of the any of the couple.
After the coverage is paid out, usually the policy ends, ending the coverage of the surviving partner as well. If both dies at the same period, the coverage will be share equally among the two life insured.
Survivorship Mortgage Insurance
A Survivorship or Survivor Mortgage Insurance is also known as Second to die Mortgage Insurance. In this type of policy, the coverage is only paid when both of the insured dies. This means that if any of the insured still survives, no benefit is payable. No money is paid until the surviving partner dies. This one is used when the life insurance proceeds are not needed by the surviving partner and are typically paid into a trust fund for the children.
This type of insurance is not common in Singapore. Due to the nature of the claim payout, the premiums are usually least expensive.
How much does Mortgage Insurance cost?
As there are no cash value element in the policy and that the coverage reduces over the policy term, the cost of term insurance is relatively cheaper than other types of life insurance such as whole life policies, limited pay whole life policies, universal life policies and investment-linked policies. Most people with high level of commitment will benefit from the low cost of coverage that mortgage/ Decreasing Term insurance provides.