Life Insurance

Do you need life insurance for a mortgage?

While some lenders require it, life insurance is not a mandatory product (like car insurance).  However, it is a sensible idea to have life insurance in place to pay off the mortgage in the event of your death.

It all depends on what you need to cover – either a mortgage or children or both.

Different Types of Life Insurance Policies

Decreasing Policy If you only have a mortgage to protect then you would need a decreasing policy.  This type of policy covers the exact mortgage balance and runs for the length of your mortgage.  The value of the policy will reduce in line with your mortgage – and if you pass away the policy will pay out the exact amount of money to pay off the mortgage.

Level Policy If you have a mortgage and children then the most suitable type of policy would be a level policy.  This type of policy covers an amount that is chosen by you – which should be the same or higher than your mortgage – and the policy can run for as long as you choose but will usually be set to run for the length of the mortgage or the number of years before you children become financially independent.  The value of this policy will never reduce – so it will pay out the full amount regardless of when you pass away.

What doesn’t life insurance cover?

Life Insurance will pay out if you pass away before your policy expires.  Most policies will also pay out if you are diagnosed with a Terminal Illness.

There are no exclusions as such for life insurance policies – even if you commit suicide the policy will still pay out.

If you pass away and a claim is raised, then the insurer will write to your GP to obtain your full medical records – before they pay out – if you have not disclosed your health information accurately to your insurer then this could result in a non-payout – this is called non-disclosure.

Get in touch

We are a family run independent financial advisory company serving the UK since 2012, and we are here to help you get the best possible life insurance cover.  Fill out the form below and a member of the team will be in touch straight away.