insurance

5 things to know on credit life insurance

Some lenders require credit life
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Some lenders require credit life

In some cases, a lender may require a borrower to take out a credit life insurance policy. According to Lynch, that's generally the case with mortgage loans, but only in instances where the buyer doesn't have a down payment of 20 percent of the home's cost. When that happens, you might have to buy credit life at the lender's insistence to get the loan.

But there's a silver lining. Over time, a borrower will increase his or her equity position in the house and when it crosses the 20 percent threshold, the borrower can ask his or her lender to cancel the policy. Lynch says it's a good idea to find appropriate life insurance coverage so that your loved ones will be able to make the mortgage payments if something happens to you.


 

 

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