Before talking about whether mortgage insurance and life insurance are the same, let’s see what each of them is talking about before we talk about their similarities or differences.
What is mortgage insurance?
Mortgage insurance can simply be referred to as a policy that protects or guide the lender. Either they borrow do not make the required payments, die, or unable to meet the agreement obligation.
Types of mortgage insurance
1. Private mortgage insurance (PMI): This is a type of mortgage insurance that protects the lender and not the borrower. This also makes the borrower buy a mortgage loan conventionally which makes the borrower make payments less than 20%.
Basically, there are five types of Private mortgage insurance (PMI) which includes:
• Borrower-paid mortgage insurance
• Single-premium mortgage insurance
• Lender-paid mortgage insurance
• Split-premium mortgage insurance
• Mortgage protection loan
2. Qualified mortgage insurance premium (MIP): This is the type of insurance broker that makes landlords or homeowners to pay for the loan.
Furthermore, the lenders use that influence to protect themselves against bad borrowers. However, the payment is two-way which is to take the upfront or the mortgage insurance premium (MIP) which is calculated annually to be paid in 12 installments.
Having talked about mortgage insurance, let’s know what life insurance is all about.
What is life insurance?
Life insurance refers to the contract between the assurer and the insurance policyholder. This involves the agreement in which the assurer agrees or promises to pay a certain amount of money upon the death of the insured person. However, depending on the contract, the life insurance policy can still pay some money if the person falls ill or in a critical condition.
There are also types of life insurance which are:
• Term insurance
• Whole insurance
In conclusion, mortgage insurance and life insurance are not the same. However, contact us, for we are the best insurance brokers and can also help you compare different options together to your utmost satisfaction and pleasure. Reach out to us now if you need the best insurance broker to help you compare different options.
Our head office is located at Building 730, Level 3, 261 Morrin Road, St Johns, Auckland 1072.