As Used in the Context of a Mortgage, a "Prepayment

question 22

Multiple Choice

As used in the context of a mortgage, a "prepayment privilege"

• A) is used to allow certain payments to be made without penalty.
• B) means that the lender can demand repayment of the loan sooner than expected.
• C) is prohibited in many Canadian provinces.
• D) means that if the borrower misses a payment on the loan, the entire amount becomes due immediately.
• E) arises in connection with an insurance contract.

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Definitions:

Coinsurance Clause

a provision in insurance policies that requires the policyholder to bear a portion of the costs of covered services, typically a percentage of the total amount.

Premium Rate

The rate charged for an insurance policy, typically a periodic payment based on the level of coverage and risk factors.

Coinsurance Clause

A provision in an insurance policy that requires the insured to bear a portion of the costs of a claim, typically after the deductible has been met.

Premiums

Payments made regularly to an insurance company for coverage, often monthly or yearly.