Mortgage protection policies are policies owned by the deceased
which pay off the outstanding loan on a property on the
deceased’s death. They are designed to protect the
beneficiaries/ dependants from the requirement of continuing to pay
the outstanding loan following the deceased’s untimely death.
They should not be confused with mortgage indemnity
guarantees which, although they are paid for by the borrower, are
actually owned by the lender. These are designed to protect the
lender, e.g. if they have lent more than the market value of the
property.
