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When you take on a mortgage this is often the biggest financial commitment that you will ever make. Ensuring that you maintain the mortgage payments means that your home is secure for you and your family. What happens if things take a turn though? What if your situation changes and you can’t work? What happens in the worst-case scenario and you pass away but leave behind a hefty mortgage balance? Our Mortgage Protection Guide outlines available options for you.
There is a saying that tells us that there are two certainties in life: taxes and death. While we face up and pay our taxes, it becomes too easy to bury our heads in the sand and ignore all things death-related. The truth is that we are all going to die. Mortgage life protection helps you to care for those that are left behind when that time comes.
Mortgage protection from life insurance sees your mortgage being taken care of. Families are left struggling with grief and dealing with practicalities on top can cause even more distress. With this mortgage protection in place, you can be sure that your loved ones are still secure and safe when you have gone.
There are two types of policy to consider. They are decreasing term and level term:
Decreasing term
With a decreasing term policy, the value of any payout falls over time. The idea is that it tracks the balance of your mortgage so that you can be sure that your remaining balance is covered.
Level term
This police-type pays out the same amount regardless of how much time has gone by. This could mean that when you pass away there are sufficient funds to cover your mortgage balance as well as having some leftover to help out your family.
The answer in its simplest form is a resounding yes! Without this form of mortgage protection in place, it is possible that your family could lose their home. A family would rarely have the ability to clear the mortgage balance or maintain any payments if the main earner were to pass away.
Many mortgage lenders will actually insist that you have life insurance in place. This means that they are covered should you pass away while having an outstanding balance.
The amount of mortgage life insurance cover that you need will depend upon your personal circumstances. It could be that you are simply looking at clearing the mortgage balance, but other financial considerations include:
• Replacing your income when you have gone
• Costs of childcare and education
• Other debts that you may have
You can use your mortgage insurance to ensure that these things are also taken off. This leaves your loved ones in the strongest position possible.
A mortgage is a loan secured agains your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
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Mainly Mortgages Ltd is authorised and regulated by the Financial Conduct Authority under number 923399 in respect of mortgages, insurances and consumer credit mediation activities only.
Subject to circumstances, a fee may be payable. Typically £99 on application & £600 on completion.
If your circumstances or history involves any adverse credit, complex situations or a commercial element then this may increase to a maximum of £2999 with £99 payable upon application. Your adviser will, in all cases, confirm all costs in writing prior to any application being made
