Why Mortgage Protection Life Cover Matters for Homeowners
When you’re excited about purchasing a new home or indeed reviewing your mortgage on an existing property, talking about death occurring, and the need for life cover may not be your priority.
Mortgage terms are increasing
It’s not unusual to borrow a mortgage over 30 – 40 years. This is a long period of time to ensure you are there to meet mortgage payments and support any family that live with you.
Life cover can provide peace of mind that in the event of you dying during the mortgage term funds are available to repay the mortgage.
What is a Decreasing Term Assurance policy?
A Decreasing Term Assurance policy is specifically designed to repay a Capital Repayment mortgage in the event of you dying during the mortgage term. The policy has an initial sum assured equivalent to the mortgage amount you borrow, with the sum assured reducing throughout the term in line with the repayment of your mortgage.
What happens with an Interest Only Mortgage?
If you had an Interest Only mortgage where the mortgage debt remains the same throughout the mortgage term, a Level Term Assurance can be arranged to repay the mortgage debt on your death.
What are the benefits of taking out life cover?
The benefit of life cover is that should death occur during the mortgage term; the outstanding mortgage can be repaid thereby leaving a property unencumbered for remaining family. This is particularly important where the property is a family home, allowing the family to continue to live in familiar surroundings mortgage free.