You've saved for a
deposit, bought your home and
made it your own. A place where you and your family feel safe and secure. But life
is full of unexpected surprises so it's best to be prepared and ensure that if
something does happen to you, your family will be able to afford the mortgage
repayments or pay the mortgage off without you. With a mortgage protection life
insurance policy, as long as you keep up with the monthly premium payments, your
family will receive a lump sum payment in the event of your death.
Research suggests one in four UK breadwinners don't have any form of life insurance to help support their family. Perhaps this is because there are several types of life insurance on the market so choosing the right policy can seem daunting. If you're looking for a life insurance policy, it's important to do some research and understand all the options.
There are three
main types of life insurance available. With level term life insurance, you
choose the policy term and cover level, and the provider pays out the agreed amount if you die within
this term. Alternatively, mortgage protection life insurance, also known as
decreasing term cover, offers a level of cover that reduces over time, usually
in line with a standard repayment mortgage. If you die within the term of the
policy, the pay-out is designed to cover the outstanding balance of your
mortgage, allowing your family to stay in their home without having to worry
about how they'll cover the cost of the mortgage repayments. Finally, critical
illness cover pays out if you are diagnosed with one of the insurer's specified
critical illnesses within the policy term, helping your
family to cope financially at a very difficult time.
For most families, the biggest fixed monthly expense is their mortgage payment For this reason, mortgage protection life insurance may be worth considering if you have a repayment mortgage. We've answered some of the most asked questions about mortgage protection life insurance and the benefits it could provide your family.
Mortgage protection
life insurance is designed to pay off the repayment mortgage on your home in
the event of your death, meaning your loved ones won't have to cope with losing
you and their home in quick succession.
Mortgage protection
life insurance decreases over the term of your plan, broadly in line with the
outstanding balance of your repayment mortgage so if you were to pass away your
family wouldn't have to worry about this large expense. And because mortgage protection life
insurance policies decrease over time, it's often cheaper than level
term life insurance which stays at the same level throughout the term of
the policy. Should you have an interest only mortgage you
may wish to consider level term life insurance.
Find out more about the types of life insurance available.
If your
circumstances change, not all polices can be amended to provide less or more
cover. However, if you have recently moved into a larger house after having
children for example, many insurers will allow you to increase your level of
protection (which may be subject to health evidence) to ensure your mortgage
protection insurance covers the full amount of any mortgage on your new
property.
Many people buy
mortgage protection life insurance at the same time as purchasing a new home,
choosing to buy cover from their bank or mortgage provider. However, checking
with other insurance providers can often get you a better deal, so have a look around and see what's available.
Find out more about shopping around for life insurance deals.
Most providers can
offer critical
illness cover as an extra level of cover when buying mortgage protection
life insurance. Critical illness cover is designed to pay out a lump sum if you
were to develop a serious condition such as cancer or a heart problem.
If you are unable
to work and pay your bills - such as mortgage repayments - adding critical
illness cover to your policy could prove invaluable. If you do take out
critical illness cover and mortgage protection life insurance together, the
policy may only pay out once, so it's best to check with your chosen insurance provider.
The amount you pay for mortgage protection life insurance is
calculated using a range of factors, including how long you need the cover for
(i.e. the length of your mortgage), your age and also your life expectancy.
To compare all your life insurance quotes quickly and easily, use our price comparison service. It's free, fast and allows you to instantly view and compare all your quotes in one straightforward search. If you're ready, compare life insurance quotes now.
