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When setting up a home loan, the lender will require the purchase of two insurance contracts for its benefit. In Israel, it is almost ubiquitously required for those considering purchasing property in Israel to obtain each of these policies.


Property Insurance

If your acquisition concerns an already built property, an assessment is required to determine the value of your property. The property insurance policy will then be appraised based on this assessment. If your acquisition concerns a property under construction or land, the insurance will take effect from the receipt of the property.

This insurance policy protects your property from events such as natural disaster, which may significantly decrease the property value.

The value of this policy must be greater than or equal to the value of the asset at the time of appraisal.


Death Insurance

Death insurance is a way for the bank to guarantee itself against the risk of default by the borrower, or the non-repayment of the credit, due to death. Insurance protects the bank first, but it is also a key element of your protection, as well as that of your family. It preserves your chances of retaining the property you bought in the event of death by guaranteeing a portion of the mortgage to be paid in the event of an untimely death.

You must complete a health questionnaire before getting a green light from your bank to take out a loan. This document will allow the insurance company to assess the risk it incurs in insuring you. In the event of an untimely death, the insurance policy is payable directly to the bank servicing your loan and applied to the remainder.

The value of this policy must be greater than or equal to the value of the loan.


Both of these insurance policies are required in order to obtain a loan in Israel. Without both policies, Israeli banks have the right to refuse a loan application. Both policies must be valid throughout the term of the loan. The Bank (the lender) is the sole beneficiary of either of these policies, as they are disbursed to the bank to offset the amount of the loan in unexpected circumstances.