With mortgage life insurance, you can rest easy knowing that your family will always have a roof over their heads. Having been proud health and mortgage protection partners for Rightmove, we can help you find the right coverage for your requirements!
Discover how mortgage life insurance can protect your home
Mortgage life insurance is one way to ensure that your loved ones can continue to live in their home once you’re no longer around. It is a type of term life insurance that will pay off your mortgage balance should you die. Unlike whole of life insurance, your term length will match the term of your mortgage.
When talking with people considering mortgage life insurance, we have to put forward worst-case scenarios. Namely, how would your family cope if you or your partner passed away? Would you be able to continue meeting your mortgage payments if you rely on two incomes?
That’s where mortgage life insurance can be a crucial lifeline, making an awful time that little bit easier.
How does mortgage life insurance work?
As a form of term life insurance, your individual policy is designed to match the timeframe of your mortgage. For example, if you’ve taken out a 25-year mortgage, you can expect your policy to be of similar length.
When it comes to finding life insurance to cover mortgages, you should bear in mind that there are two different types of term insurance: level term insurance and decreasing life insurance.
Level Term Life Insurance
With level term life insurance, your monthly premiums and the lump sum payout remain the same throughout the policy’s term.
This means that you can budget for your insurance payments and avoid any unexpected changes in cost.
However, level term life insurance premiums are generally higher than those for decreasing term life insurance.
Level term life insurance tends to be recommended for those with an interest-only mortgage.
Decreasing Term Life Insurance
Decreasing term life insurance provides a lump sum amount that decreases over time, in line with the way a repayment mortgage decreases.
Your monthly premiums are guaranteed and won’t change over the term of the policy.
Our experts are more likely to suggest a decreasing term life insurance policy if you have a repayment mortgage.
We don’t expect our clients to have a clear understanding of what mortgage protection life insurance best suits them, but we are happy to provide free advice and guidance. Following our phone conversation, we’ll search our network of trusted insurance providers to find the most suitable policy for you. We often have access to exclusive deals unavailable to the general public!
How Much Does Mortgage Life Insurance Cost?
The quotes you may receive on mortgage life insurance can vary depending on various factors. These can include:
- Age
- Health
- Family
- Medical history
- Lifestyle
- Details of your mortgage
Let’s take a look at some examples of how much mortgage protection life insurance can cost.
Mortgage Life Insurance Example Cost #1
John is a software engineer who is married with two children. He is 35 years old and a non-smoker. He and his wife have just bought a new house. The outstanding mortgage amount is £200,000 with a term of 25 years. He wants to make sure that his family is financially protected, should he die.
John decides to take out a level term policy with a payout amount of £200,000 over a term of 25 years.
John’s monthly premiums are £10.08. John would pay £120.96 per year.
£10.08 per month | £200k payout
Mortgage Life Insurance Example Cost #2
Helen is 45 years old. She is an accountant. She is married with one child. She has an outstanding mortgage of £100,000 over 15 years. She is a cancer survivor and was given the all-clear two years ago. She has a family history of cancer. She decides to take out a decreasing term policy with an initial £100,000 payout over 15 years.
Helen’s monthly premium starts at £6.61 .
Her payout starts at £100,000 and also decreases over time.
At the start of the policy: £6.61 per month and £100k payout
As you can see, the premiums differ for both scenarios.
When it comes to life plans, it’s essential to have a policy built around you – not a one-size-fits-all approach that may not give you the cover you deserve.
With our help, we can talk through the available options and build a policy plan that gives you all the protection you need to safeguard your home.
How to get mortgage life insurance?
Many mortgage providers may require life insurance as part of their conditional offer. However, it’s important to choose the right policy for your needs rather than taking the only option available from your mortgage lender.
At The Insurance Surgery, we offer mortgage life insurance cover that is tailored to your specific requirements. That’s why we don’t give online quotes. Instead, we have a friendly phone chat with you to find the best policy for your needs and budget.
When you contact us, we’ll do our best to find out more about you and your mortgage protection needs. We’ll ask you questions like:
- How old are you?
- What is your job?
- Do you smoke or drink alcohol?
- What is your medical history?
- How much cover do you want?
- How long do you want the cover to last?
- How much is outstanding on your mortgage?
Then we’ll search our network of trusted insurance providers to find the most suitable policy for you. We often have access to exclusive deals that aren’t available to the general public.
We’ll provide you with a free, no-obligation quote that reflects the best value for your money. Our price promise means that you won’t find a cheaper quote anywhere else. If you’re happy with the quote, we’ll get your policy started as soon as possible. And we’ll continue to support you, answering your questions along the way.
Mortgage Life Insurance Add-Ons
For additional mortgage security, you may want to consider the following products!
Critical Illness Cover
Critical illness cover can help you pay off some of your mortgage if you were to suddenly get diagnosed with a serious illness.
Income Protection Insurance
Income Protection Insurance will provide you with a monthly tax-free income if you’re unable to work due to illness or injury.
What happens to your life insurance when your mortgage is paid off?
If you pay off your mortgage before your policy ends, you have four choices:
- Cancel the mortgage life insurance cover.
- Cancel the mortgage life insurance and take out a new life insurance policy.
- Continue with the mortgage life insurance and make no changes to the policy.
- Continue with the mortgage life insurance policy, but adapt it to suit your current lifestyle.
Frequently Asked Questions.
Mortgage protection insurance is not a legal requirement, but if you are taking out a joint mortgage loan, many lenders will question how you would make your repayments if one person were to pass away.
Mortgage protection insurance provides financial security for your loved ones by paying out a lump sum to clear your mortgage if you die within the term of the policy.
You may find, however, that some mortgage lenders will require that you have life insurance as a condition of the mortgage.
Mortgage life insurance can be a valuable investment for homeowners who want to protect their loved ones financially. It pays out a lump sum to clear your mortgage if you die during the term of the policy.
Mortgage life insurance covers the cost of your outstanding mortgage if you die within the term of the policy. It is designed to protect those you leave behind from struggling to pay mortgage payments or being forced to sell their home.
Yes, you can cancel your mortgage life insurance, but this will mean that your family is no longer protected financially. Check your policy terms and conditions to find out more.
Useful Links
If you have any further questions about anything to do with Life Insurance and protection for your family, please feel free to contact our team of expert Life Insurance advisors.
Click the links below to find out more: