Why would I want Mortgage Life Insurance?

• To repay your mortgage if you die or become terminally ill*
• Because it works with a Repayment mortgage.

Mortgage Life Insurance is a way of making sure that your outstanding repayment mortgage will be repaid if you die or become terminally ill. As Mortgage Life Insurance provides steadily decreasing cover it is much cheaper than Life Insurance which provides level cover. * Please note that most Mortgage Life Insurance policies include terminal illness cover at no extra cost.

If you have a Repayment mortgage, the amount of cover you need decreases. If you have an Interest Only mortgage, the sum outstanding to the mortgage provider remains unchanged as you don’t repay any capital until the mortgage comes to its end. So you’ll need standard, level cover Life Insurance.

If your mortgage has been taken out in joint names you should have a “Joint” policy (some mortgage providers will insist on this).

For mortgage purposes, “Joint” policies are always written on “first life”. This means that the policy will pay out if either of the policyholders dies during the policy’s term. However you should be aware that once a “Joint” policy has paid out on the first death, the policy is finished – it will not pay out again if the second person were to die.

If you want insurance that would pay your monthly mortgage repayments if you were off work through sickness, accident or unemployment, then you need Mortgage Payment Protection Insurance.

If you want insurance that would totally repay your outstanding mortgage if you became critically ill, you need Critical Illness Insurance.

With Mortgage Life Insurance, if you have to claim on the policy your Insurance Company will send the money direct to your mortgage lender.

Please note : The information contained within the FAQ section has been written by Mortgage Protected Online

Related questions:

What’s the difference between Mortgage Life Insurance and normal Life Insurance?

What’s the difference between Terminal Illness cover and Critical Illness cover?

Can I include Critical Illness Insurance in my Life Insurance Policy?

What is Mortgage Payment Protection Insurance?

How do I make a claim?