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Insurers to guarantee mortgages

By Vision Reporter

Added 4th December 2007 03:00 AM

INSURANCE companies have stepped in to guarantee mortgages for clients who lack collateral. The credit life insurance policy covers the mortgage acquired by a policy holder.

INSURANCE companies have stepped in to guarantee mortgages for clients who lack collateral. The credit life insurance policy covers the mortgage acquired by a policy holder.

By Charles Bwogi

INSURANCE companies have stepped in to guarantee mortgages for clients who lack collateral. The credit life insurance policy covers the mortgage acquired by a policy holder.

It forms a guarantee to the lending institution that the person under cover will not default on the mortgage, Kwame Ejalu, the managing director of Alexander Forbes, explained.

Ejalu said the policy would help a wider section of the public acquire houses which “for most people is the single best valuable asset.”

The Knight Frank Africa’s 2007 report launched recently said Kampala was short of office, retail, industrial and accommodation space as the demand continues to outstrip supply.

“The product has two effects; first it protects the policy holder in that in the case of death or permanent incapacitation, the insurance clears all the outstanding debt on the mortgage without any pressure to beneficiaries.

“On the part of the bank, the policy guarantees repayment of the funds lent on a mortgage.

“No bank is interested in selling its clients’ assets. Their major interest is having their money back with interest and this is what the policy guarantees,” Ejalu said.

Insurers to guarantee mortgages

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