Life - Individual / Group Mortgage Protection

Individual / Group Mortgage Protection

Today, an individual may have a good job, a nice car and a lovely house, which comes with a large mortgage to repay. At the moment life is good. But if anything happens, ones family may not be able to keep up those large mortgage repayments like one would before. This could mean that they may be left without a roof over their heads.

 

Mortgage Protection Policy

gives one peace of mind and ensures that in case of the unfortunate death of the loanee, one's family does not lose the house. This type of policy is usually in the form of a decreasing term assurance and is effected when the loan is granted.

 

The Sum Assured at the initial stage is equal to the amount of the Mortgage Loan and it decreases each year as the Mortgage is paid off, keeping in line with the reduction of the amount of capital outstanding. Cover is arranged to expire at the end of the Mortgage repayment.

 

A level premium is charged to cater for the high-risk element in the early years of the assurance and lower risk during the later years. If the borrower does not survive the term of the assurance, part of the initial capital will have been repaid and the policy will pay to the financier the outstanding amount.

 

Upon survival, the mortgage loan will have been repaid in full and the policy will therefore expire, since it will have achieved its goal of providing security throughout the entire loan-repaying period. The policy does not participate in bonuses and does not acquire a cash value.

 

Example 1:

Assumed Age - 35 Years
Sum Assured - Ksh. 1,000,000/=
Rate Of Interest - 6%
Term Of Repayment - 10 Years
Annual Premium - Ksh. 6,713/=


Example 2:

Assumed Age - 35 Years
Sum Assured - Ksh. 1,000,000/=
Rate Of Interest - 20% - 25%
Term Of Repayment - 10 Years
Annual Premium - Ksh. 7,035/=