The responsibility of contracting insurance for housing loans cannot be avoided, as this is a guarantee for banks. Due to unexpected circumstances, the possibility of facing the risks of a mortgage debt is latent. This is why the person directly involved is the debtor of the credit.
The hiring of life insurance is the most convenient and advisable because it covers a debt that is maintained for a long time. It is recalled that a family calamity for having a housing debt affects not only the debtor but also his family. Either, by the death of the debtor, the spouse and children, or by total or permanent disability thereof.
If it happens…
Otherwise, when one of the cases happens, the financial entity is the one that charges the value of the insurance. Bearing in mind that, at the time the application is submitted, the amount of the debt is less. And that the date on which the life insurance came into effect is the same on which the financial obligation was incurred. Therefore, there is a remainder in the hands of the life insurance beneficiaries of the mortgage loan.
Is it obligatory to take out insurance for housing loans?
As mentioned above, the first beneficiary for life insurance claim is the creditor bank. Since it is the guarantee that you have given money to your client. But at no time is the obligation to acquire life insurance with them.
Although it is vital to obtain life insurance, for the coverage of the mortgage loan, it does not mean that it is done with the same bank. The borrower of the loan has the possibility of contracting life insurance with the entity that decides. The one that offers the best benefits and an unbeatable price.
The important thing is that the insurance to be contracted has the same conditions and coverage that the lending entity offers to the credit. Or if necessary, that the entity that disburses the credit has the approval of the debtor to contract life insurance.
And to conclude, it can be said that it is considered reasonable to take out life insurance for the housing loan. But the essential thing is to verify well the conditions and benefits that the document contains before accepting with signature.