Mortgage Insurance

When purchased from the company also providing the mortgage, this is a form of life insurance where premiums are paid by the mortgage customer but the owner and beneficiary of the policy is the mortgage lender (who then “forgives” the outstanding debt) . Premiums are level for the life of the mortgage despite the estate value of the insurance reducing as the mortgage is paid down over time. (Technically called “Creditor Insurance” as it is designed to protect the creditor (lender) .)