Life Insurance for Mortgage

Life Insurance for Mortgage - specialist life cover to help protect your mortgage. Compare the whole market and save up to 40% on Life Insurance for your Mortgage.

Mortgage payments are probably the biggest monthly payments you would have to make. In cases of loss of income, it might be hard to sustain these payments and could lead to huge penalties and accumulation. Paying mortgage regularly and on-time is an important part of financial stability.

What is mortgage life insurance?

The loss of a loved one is hard to bear and financially threatening. Mortgage life insurance is a specific type of insurance that allows you to take care of mortgage even before dreaded events occur. The main idea behind this is you’ll be able to leave your loved ones without having them shoulder your mortgage bills.

There are three different types of life mortgage insurance. Your choice will vary greatly on your needs and personal choices.

Decreasing term mortgage life insurance

Mortgage debts decreases with over time, roughly matching the decreasing amount of your mortgage debt. If you owe £125,000 now, after 25 years you might just owe £1,000. The monthly premiums however, will remain the same all through-out the term. This is suitable for people who pay-off the capital and not just cover the interests.

Level term mortgage life insurance

This kind of policy has a set amount of lump sum to be paid out and does not decrease over time. If your policy covers £100,000, you will still be able to get this amount if you die at the last year of your policy. This kind of insurance is suitable for those who want to leave a little extra for those they leave behind. This will help your loved ones financially by helping them cope with other bills such as funeral, tuition and car expenses.

Whole life insurance policy

This policy is not specifically for mortgages but may also be used as such. The premiums for this type of insurance may be more expensive than the other options on this hence it is the less popular choice. Whole life insurance often use part of your premium for investment to counter inflation. If the insurance company choose investments that are slow growing, your cash benefit might be unable to cope with inflation and thus diminish in value.

Mortgage life insurance policies are perfect for those who pay a mortgage bill regularly. This allows you peace of mind that during the event of your death, your loved ones will be spared from financial burden especially form shouldering your mortgage costs.

Getting life insurance for your mortgage will ensure resources for the continuing payment of your debs at the event of your death. This kind of protection saves the ones you love from having to shoulder significant mortgage payments you will leave behind. If you’re looking at get a policy that will fit your needs, we will highlight important items that you would want to be familiar with.

Decreasing term or level term

If you pay capital with your mortgage loans and not just the interest, a decreasing term life mortgage insurance might be suitable for you. The premiums in this type of insurance are fixed and the coverage decreases proportionally to your mortgage amount. A level term insurance, on the other hand, remains the same all throughout the term and will leave a little extra cash for your loved ones in the event of your death.

Life and critical illness cover

This insurance features allows you to claim for insurance benefits if you contract any dreaded illnesses. These illnesses will prevent you from continuing your current income generating activities. The list of illnesses are very specific and may vary from insurance company to another.

Guaranteed vs Reviewable

This refers to the premium you pay. Guaranteed premiums protect you from the likelihood of an insurance company to raise the amount you pay per month. This could mean higher initial premium payments. Reviewable allows your company to raise the premiums reasonable over time to counter inflation.

Benefits for children

Some insurance policies also offer additional benefits when anything happens to your children. There are hospitalisation and accident benefits. If a parent contracts a critical illness or disability, there could also be financial support for an experienced child minder.

Risks or exclusion

Anyone getting a plan must be acquainted with the exclusions or the events leading to death or critical illness that will not be covered by the insurance company. These exclusions often include injuries or death from attempted suicide but others list this as an exclusion only on the first year of the active policy.

Using a trust

A trust explicitly states to whom benefits will be released to in the case of your death. This will ensure that the pay-outs will be quicker and it could also be inheritance-tax deductible. If you are able to find someone you can depend on, beneficiaries like your children will be provided financially but will not have full access to the funds.

There are a lot more aspects to insurance that work with specific risk factors and needs. Talking to a professional broker will help you find the perfect plan for your needs that could make the most out of your set budget.