Mortgage Life Cover–
Life insurance protecting your mortgage
Mortgage Life Cover is life Insurance which pays out a cash lump sum to
repay your outstanding mortgage or loans if you die, or become
terminally ill. Hence, the borrowing will be repaid and no debts will be
left to your spouse, partner or family. Within the life cover plans you
can also include other options such as critical illness cover – this
cover will payout a lump sum in the event of being diagnosed with a
specified critical illness. This would payout the sum assured and repay
the outstanding borrowing giving you peace of mind. An example of
critical illnesses which the policies would payout on can be seen
clicking on the ? button when getting a quote. Please read the Key facts
Document issued by the provider for a full list of the critical
illnesses included in their policies.
There are 2 main types of mortgage life cover:
-
Mortgage Decreasing Life
Insurance: This type of policy is typically used when you have a
capital and interest mortgage (repayment mortgage). With a capital
and interest mortgage you are repaying your mortgage and your
outstanding balance is reducing throughout the mortgage term. With
mortgage decreasing life insurance, the sum assured decreases
throughout the term of the policy. The policy is initially taken out
to run along side the mortgage and should pay off the outstanding
balance in the event of death or diagnosis of certain critical
illnesses (if included in policy).
Warning: Please be aware that should
you default on your mortgage payment, incurr charges, borrow extra
funds, change the term of your mortgage or have any changes to your
mortgage since taking out the policy then your mortgage decreasing
life insurance might not fully repay the outstanding balance owing.
-
Level Term Life Insurance: With Level Term Life
Insurance, the sum assured remains unchanged throughout the term of
the policy. Level Term Life Insurance is often used to cover
interest only mortgages, with an interest only mortgage you are only
paying interest to the lender, the amount you owe remains the same.
Critical illness can be included in this policy.
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Protecting You, your Family and your Home
