Mortgage Insurance in Israel: What You Must Know

Life insurance is designed to cover the remaining balance of the loan in the event of the death of one of the borrowers. This ensures that family members are not left with a significant debt they cannot repay.

The cost of the premium is influenced by several factors:

• Age of the borrower
• Medical condition and history
• Total loan amount
• Term of the mortgage

Building insurance covers physical damage to the property structure. Since the property serves as collateral for the bank, they must ensure its value is protected against risks such as:

• Fire
• Flooding and water damage
• Earthquakes

The answer is no. While banks offer these policies through their own agencies, you are entitled to purchase insurance from any external insurance company. In many cases, external policies are significantly cheaper or offer better coverage. It is highly recommended to compare prices before signing.

• Sticking with the bank: Not checking external alternatives can cost you thousands of shekels over the life of the loan.
• Ignoring exclusions: Not reading what the policy doesn't cover.
• Set and forget: Failing to update the policy as the mortgage balance decreases or if personal circumstances change.

Mortgage insurance is an integral part of the home-buying process. A proper review of costs and terms can save you money and provide essential financial security for your family.

• Capital Market, Insurance and Savings Authority: https://www.gov.il/he/departments/capital_market_authority
• Bank of Israel: https://www.boi.org.il