Mortgage protection insurance is not the same as Lenders Mortgage Insurance. Mortgage protection is made to protect the one that is insured. If the insured person died or become permanently disabled, the insurance company will pay out a lump sum benefit payment to the person which they can use to pay the mortgage.
On the other hand, the Lenders Mortgage Insurance protects the home loan lender or provider if the borrower cannot pay the mortgage anymore. This insurance makes sure that the lender or the bank will not lose any money when that happens. Lender’s Mortgage Insurance is often required if the borrower will request for more than 80% of the property value or if the borrower takes a low document home loan.
The global financial crisis that has brought more scrutiny amongst insurance companies.Nowadays, the mortgage insurance company will review the profile of the applying party for up to four to five days. If they require additional information, the reviewing process would take another four to five days. This is to make sure that the insurance company doesn’t make a bad investment.
