| Mortgage life insurance is
commonly referred to as mortgage life protection and it
will pay off your mortgage in the event of your death,
or, at an extra cost, critical
illness. It is often referred to simply as 'mortgage
protection insurance' but is actually a form of life insurance
offering a very different type of cover to regular UK
residential or rental property mortgage protection insurance.
If you have received mortgage advice, you will probably be aware that mortgage protection is life cover that decreases over
a pre-determined period of time; this is why it is also
referred to as 'decreasing term assurance'. As the amount
of money that you owe your UK mortgage provider decreases,
so does the sum insured. For example, a twenty-year
mortgage life protection policy for £100, 000
would pay out the full amount if the policyholder died
shortly after the policy's inception, but if the policyholder's
death occurred ten years later it might pay out £70,
000. If you die, mortgage cover will pay out the sum
insured, in other words, the amount of money still owing
to your mortgage provider. These policies are often
substantially cheaper than other level term life insurance
policies because of the way in which the level of cover
reduces throughout the term, keeping the premiums low.
Most UK mortgage life protection insurance companies
will also allow you to take out critical illness cover
with your mortgage life protection policy. In this way
you will be covered not only in the event of your death
but also if you fall victim to a terminal illness. To
learn more about critical illness cover click here.
Read a summary of the special features of mortgage life
protection insurance here.
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