Mortgage life insurance would allow your loved ones the opportunity of paying off the outstanding balance on the mortgage in the event of your death.
A policy could be well worth considering and lenders generally ask you to take out the insurance at the time of taking on the mortgage.
Mortgage life insurance is also called mortgage term assurance by many insurance providers.
Some people also refer to the protection as mortgage protection.
However it is important not to confuse mortgage life insurance with mortgage payment protection which are two entirely different products.
Mortgage life insurance would only payout upon your death and mortgage protection is taken out to safeguard your monthly repayments against the possibility of unemployment or incapacitation.
When considering taking out mortgage life insurance you would have to check the details of the policy you were considering before taking on the cover.
Any quotes that you do get with a provider should come with what is know as the key facts policy and this would provide you with all the information regarding what the cover entails.
You could also use a specialist insurance broker to search out the quotes on your behalf and then compare the cheapest quotes in your own time.
The majority of providers would offer two types of life insurance for your mortgage.
These is level term and decreasing term.
Level term mortgage life insurance means that the sum of money you insure remains the same throughout the term of the insurance.
The term you would take the insurance out for would of course be the time you have left to pay on your mortgage.
Decreasing term insurance would as the name suggests decrease in line with the mortgage.
This means that as you pay off your mortgage the amount you owe reduces and so would the amount that you receive back at your time of passing.
However the sum your loved ones would receive would always be enough to pay off what was left on the mortgage.
If there were two names on the mortgage then both names could be covered by mortgage life insurance.
You would usually have the option of taking out a joint policy whereby the insurance company would payout in the event of either partner named on the policy passing away.
Or you could take out two separate forms of cover.
Shopping around and comparing the cost of each would allow you to determine which form would be the most suitable for your circumstances.
· Mortgage life insurance would allow you peace of mind that your loved ones would not be left struggling to continue meeting the repayments after your death as it would provide them with a sum of money to payoff the outstanding mortgage balance.
· Do not confuse mortgage life insurance with mortgage payment protection.
Mortgage payment protection would pay a portion of your monthly repayment if you become unemployed or incapacitated.
Mortgage life insurance would allow those you leave behind the luxury of paying off the mortgage in a lump sum.
· Always take the time to read the terms and conditions that come with the insurance before taking it on.
· Shop around and compare the premiums or allow a specialist insurance broker to make a search on your behalf.
· If both partners are paying the mortgage then look into taking out a joint mortgage life insurance policy of consider taking separate insurance.