According to Resolution No. 66 of the Financial Regulatory Commission (FRC) of Mongolia, starting August 1, 2025, a new regulation will require all mortgage loan borrowers to obtain life insurance exclusively through long-term life insurance providers.

Under this new regulation, individuals applying for a new mortgage loan, as well as those whose current insurance contracts are expiring and need to be renewed, must now enroll in a long-term life insurance policy.

At present, most borrowers are covered under general insurance, which typically provides protection only in the event of accidental death. However, the leading causes of death in Mongolia are illness-related, meaning general insurance policies do not cover deaths caused by common conditions such as stroke or cancer.

Mortgage-related financial risks are not only tied to income stability, but also closely connected to a borrower’s health condition. If a borrower were to pass away due to illness and no compensation is paid out, the responsibility for the outstanding loan falls on the co-borrower. In cases where the co-borrower is unable to repay the loan, the property may be repossessed, placing the family under severe financial pressure and at risk of losing their home.

Long-term life insurance is a life insurance product that provides compensation equivalent to the outstanding loan amount in the event the borrower faces a risk during the term of the insurance contract. Specifically, in cases where the borrower passes away due to illness (including chronic diseases and cancer) or an accident, or suffers a permanent disability of 70% or more, the insurance company will fully repay the remaining loan balance, thereby protecting the borrower and their family from potential financial risk.

This type of insurance is reinsured by an international reinsurer, which ensures the reliability of the compensation and offers 24/7 global protection, regardless of time or geographic location. Additionally, the insurance premium can be paid either as a lump sum or annually, depending on the borrower’s preference. Premiums are calculated individually based on factors such as age, gender, and loan term, making the insurance tailored specifically to each borrower.