Mortgage life insurance is designed to pay off the rest of a mortgage when the policy holder dies. You can generally take out single or joint cover, and you can choose policies to suit repayment or interest-only mortgages.
Types of mortgage life insurance
There are two main types of mortgage life insurance:
FAQs about mortgage life insurance
What is the difference between Level and Decreasing Cover?
Level Cover is life insurance where both the monthly payments and the payout amount stay the same over the length of your policy. If you die within the term, your family will be given the pre-agreed sum.
For Decreasing Cover, the payout sum shrinks throughout the length of your policy. Your monthly payments stay the same but how much you pay each month is usually less than Level Cover. You could use it to help cover a mortgage or any other loan that gradually gets repaid.
How long do I need to make payments for?
You’ll need to keep making monthly payments throughout the period of cover, unless you die or you are diagnosed with a terminal illness. You can stop making your payments at any time. But if you do, your cover will end, and you won't get anything back.
What if I stop paying my life insurance?
If you stop making your monthly payments, then your cover will stop. It is worth remembering that you won’t get any money back, as this isn’t a savings plan. You can’t cash in your cover at any time.