Is Life Insurance On A Mortgage Compulsory?
3998 POINTSview profileMatt BenoreFounder, DenverWest Insurance Professionals, Inc.,Life Insurance on a mortgage IS NOT compulsory however the mortgage or lending company may require you to have life insurance with the company listed as the beneficiary until the loan is paid off. This is what we call a Collateral Assignment. If there is any benefit remaining after the loan is paid off, in the event of your death, the remaining listed beneficiary's will be paid according to the percentages listed.Answered on January 27, 2014flag this answer.JPG)
63333 POINTSview profilePeggy MaceMost of the U.S.No, life insurance on a mortgage is not compulsory. However, if you cannot make a down payment of 80% or more when you secure your mortgage, you will probably be required to purchase PMI (Private Mortgage Insurance). The lender may ask you to purchase PMI through them, and it can be costly. Term life insurance, by contrast, is usually cost effective and an excellent vehicle for protecting both your mortgage and your lender.Answered on January 27, 2014flag this answer
1492 POINTSview profileJeff DavisInsurance Advisor, Lordship Insurance Services, CaliforniaIt is not mandatory to have mortgage insurance. There are three types of insurance for a mortgage. The first is private mortgage insurance which is required by lenders when borrowers put down less than 20% of the purchase price. The second is insurance that is placed on the borrower and will pay off the mortgage should the borrower die. The third is insurance that is placed on the borrower but is no connected to the mortgage, only to the borrower. His heirs can use the funds to pay off the mortgage if they want to but are not obligated to.Answered on January 30, 2014flag this answer
37376 POINTSview profileDavid G. Pipes, CLU®, RICP®Business Development Officer, T.D. McNeil Insurance Services, Fresno, CaliforniaA life insurance policy covering the mortgage is rarely required. That doesn’t mean that a privately place mortgage might not require such coverage. The problem with the requirement is that it depends upon the health of the customer. Mortgage companies universally require “hazard” insurance but that does not include the life of the borrower.Answered on September 4, 2014flag this answer- 624 POINTSview profileBILL HANNAAgent, WMH Consulting LLC, Fort Worth, TexasLife insurance on a mortgage is not mandatory.However, Private Mortgage Insurance (PMI) may be required by the lender if less than 20% of the mortgage amount is made by the borrower as a down payment. The lender may request that the Private Mortgage Insurance be purchased through them. Be sure to review options to (PMI) for example Term Insurance as an alternative...Answered on June 10, 2015flag this answer
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