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Have you wondered what does Mortgage Retention Insurance (MRI) is for when you are paying to your respective lending institutions like Home Mutual Development Fund (PAG-IBIG) or at commercial banks or private lending companies? Sometimes, the licensed real estate agent professionals might have missed out to discuss to you about these about this type of insurance included in your other charges or they might have discussed this to you but you have forgotten about it or still figuring out the charges on your computations.
How does Mortgage Retention Insurance works?
Mortgage Retention Insurance comes in many names such as Mortgage Life Insurance (MRI) or Mortgage Life Assurance or Mortgage Protection Options etc just to name a few by insurance providers here and abroad. MRI is defined as decreasing-term life insurance policy taken by a mortgagor to repay the balance on a mortgage if the person dies before its full repayment. In simple terms, it is designed to protect a repayment mortgage as it will take out the previous balance or outstanding debt for payment once the borrower is deceased and the main beneficiary of this policy is the mortgage company or the lending institutions. MRIs are usually tied in Home Loan application with Philippine banks or mortgage companies.
