Should I consider Mortgage Life Insurance instead?
Only if you have a Repayment Mortgage and want cover
for it.
Mortgage Life Insurance is specially tailored
to work with a Repayment Mortgage. The policy is designed
so that your insurance cover decreases at the same rate as you pay off
the capital you borrowed on your mortgage. So if you died, the sum insured
should be just be enough to pay off your repayment mortgage but no more.
This decreasing cover reduces the cost of this type of policy
– indeed Mortgage life Insurance is sometimes known as low cost
life insurance.
Terminal Illness cover is included in all Mortgage Life
Insurance policies sold by Brokers Online, so you will also be covered
if you are diagnosed with a terminal illness.
Mortgage Life Insurance is not appropriate if you want to
cover an Interest Only Mortgage. In this case you need to stick with level
cover Life Insurance.
You should be aware that all Joint policies
associated with mortgages are written on a first life
basis. This means that the policy will pay out if either one of the policyholder’s
dies before the end of the policy’s term. However, it also means
that once a Joint policy has paid out on the first death, the policy is
finished – it will not pay out again if the other person also dies.
You should be aware that if you have a Joint Mortgage you
will need a Joint Life Insurance policy to insure both mortgage holders.
You may also want to consider protection to cover your monthly
mortgage payments if you are unable to work due to illness, accident or
unemployment. If this is the kind of insurance you are looking for then
you need Mortgage Payment Protection Insurance.