A mortgage is often the largest purchase the majority of Brits pay for over the course of their lifetime, and the huge sum of money they borrow means they are paying it back for a large proportion of their life, making it a huge commitment.
If you have a mortgage you will know how difficult it is to meet your monthly repayments, even with a good income. This cost will be even more difficult to stay on top of for those who have lost a spouse or partner to whom they rely on to meet this financial commitment.
Mortgage Life Insurance is a specific type of life insurance that is taken out by the mortgage owner to cover the life of the repayments should the main source of income be lost due to death.
There are typically two types of Mortgage Life Insurance ñ mortgage term assurance, and mortgage decreasing term assurance.
You can either take out mortgage life assurance as a couple or on your own. Sometimes you can get a better deal if both you and your partner take out separate policies on your specific salary however, so compare the market before committing.
Mortgage Term Assurance
This is when the policy pays out and covers the repayments of your mortgage for the lifetime of the policy. It does this if the policy holder is diagnosed with a terminal illness, or dies suddenly.
Mortgage decreasing term assurance is when the policy pays out a decreasing amount over the period ñ as the amount the mortgage holder needs to pay back decreases over time.
Taking out Mortgage Term Assurance
There are certain factors which will affect the price of the premiums you pay on your particular mortgage term assurance policy.
Mortgage Size – The larger your mortgage, the more expensive the policy will be as the insurance company will have to pay out more to cover the repayments in the event of your death.
Health Issues – An insurance company will also asses your current health to rate how likely you are to die and your family claim on your insurance. Whether you smoke or not will affect this, your gender, age and previous medical history will too. The better health you are in when you take out the insurance, the cheaper the policy.