 Sam
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 Posted: Fri Jun 11, 2004 4:57 am Post subject: Non-profit endowment policy for interest-only mortgage |
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Non-profit endowment policies are life insurance policies required to pay off interest-only mortgages. These policies are designed specially to pay off the outstanding loan balance. The payments are made on a specific date on or prior to the death of the borrower.
Unlike other endowment policies, non-profit policies do not offer the package for investment. Instead, the policy provides the life assurance that helps to pay off your mortgage debt. Some of the features of the non-profit endowment policies are given below:
- The policy offers no other benefit except the life coverage for mortgage payments.
- No annual or final bonus is allowed by this policy and hence you don't receive extra cash when the policy matures.
- The monthly payments made during the loan period cover up the interest payments on the mortgage and the premium to the endowment policy.
- As a policy holder, you will have to pay fixed amount of premiums throughout the term of the policy.
A non-profit endowment policy no doubt provides you with the cash to repay the mortgage at the end of the loan term. But the premiums are quite high since the amount obtained through the policy is guaranteed. Moreover, the policy does not share the profits of the company unlike other endowment policies. So a non-profit endowment policy offers no such financial benefits except that it provides the life assurance coverage. |
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