A home is often the biggest expense of many people's lives and is also typically one of the things which is most important to them. Because mortgages often take years and even decades to pay off, they can often cause headaches for borrowers. As such some people tend to be concerned about what would happen to their loved ones if they died and left a considerable amount outstanding on the home loan. This is what mortgage life cover has been designed to provide reassurance for.
All types of life insurance usually involve a payout in the event of the policy holder's death, and the cash can go to a close family member, but not necessarily a blood relative, so it can be a husband or wife. It can even go to someone like a business partner if you prefer, say if you have a mortgage taken out jointly with them for a business premises. Mortgage life cover is no different and will provide a sum of money to go towards paying off the balance of the mortgage on your death.
Mortgage protection like this normally comes in two different types-and this can depend on the exact type of deal that you have - ie a repayment or an interest only mortgage. Firstly decreasing term insurance is specifically geared to people with a repayment deal. The idea of this is that as the amount owed on the mortgage goes down over time so does the amount of payout guarantees by decreasing term insurance policy. This guarantees that the amount your family would get in the event of your death covers the outstanding balance.
The usual procedure is to take out a policy which covers the whole term of the mortgage itself, and then the cash is paid should the person die during its term.
Then there is level term insurance which is for people who have a repayment mortgage with the balance outstanding staying the same through the lifetime of the home loan and the repayments made only covering the interest. The amount insured remains the same through the whole life of this policy because the actual outstanding balance on the home loan says the same.
This means there is a fixed amount which does not change which is paid out in the event of the death of a policy holder. Both of these types of mortgage life cover may include terminal illness cover which will pay off someone's outstanding home loan in the event they are diagnosed with a terminal illness, rather than paying out on the actual death.
Then there is critical illness cover which can be added to all types of life cover including those related to a mortgage. Normally this will payout in the event that somebody is diagnosed with a serious but not necessarily fatal condition, such as cancer or multiple sclerosis.
Mortgage life cover is a straightforward way of helping to get peace of mind on what would happen to your loved ones if you died and left an outstanding mortgage balance. With plenty of insurers, not just mortgage providers, able to supply policies, there is always the chance you will get an effective and affordable deal.
David Thomson is Chief Executive of BestDealInsurance a completely independent specialist broker dedicated to providing their clients with the best insurance deal.
They offer great value life insurance as well as, critical illness and income protection, ensuring that their clients have the protection they need, without leaving a hole in their pocket.
All types of life insurance usually involve a payout in the event of the policy holder's death, and the cash can go to a close family member, but not necessarily a blood relative, so it can be a husband or wife. It can even go to someone like a business partner if you prefer, say if you have a mortgage taken out jointly with them for a business premises. Mortgage life cover is no different and will provide a sum of money to go towards paying off the balance of the mortgage on your death.
Mortgage protection like this normally comes in two different types-and this can depend on the exact type of deal that you have - ie a repayment or an interest only mortgage. Firstly decreasing term insurance is specifically geared to people with a repayment deal. The idea of this is that as the amount owed on the mortgage goes down over time so does the amount of payout guarantees by decreasing term insurance policy. This guarantees that the amount your family would get in the event of your death covers the outstanding balance.
The usual procedure is to take out a policy which covers the whole term of the mortgage itself, and then the cash is paid should the person die during its term.
Then there is level term insurance which is for people who have a repayment mortgage with the balance outstanding staying the same through the lifetime of the home loan and the repayments made only covering the interest. The amount insured remains the same through the whole life of this policy because the actual outstanding balance on the home loan says the same.
This means there is a fixed amount which does not change which is paid out in the event of the death of a policy holder. Both of these types of mortgage life cover may include terminal illness cover which will pay off someone's outstanding home loan in the event they are diagnosed with a terminal illness, rather than paying out on the actual death.
Then there is critical illness cover which can be added to all types of life cover including those related to a mortgage. Normally this will payout in the event that somebody is diagnosed with a serious but not necessarily fatal condition, such as cancer or multiple sclerosis.
Mortgage life cover is a straightforward way of helping to get peace of mind on what would happen to your loved ones if you died and left an outstanding mortgage balance. With plenty of insurers, not just mortgage providers, able to supply policies, there is always the chance you will get an effective and affordable deal.
David Thomson is Chief Executive of BestDealInsurance a completely independent specialist broker dedicated to providing their clients with the best insurance deal.
They offer great value life insurance as well as, critical illness and income protection, ensuring that their clients have the protection they need, without leaving a hole in their pocket.