Why Mortgage Life Assurance is Essential
Mortgage life assurance is a type of insurance that pays out a lump sum if you die before the end of your mortgage term. You can use this lump sum to pay off your mortgage or to provide for your family’s financial needs in other ways.
Mortgage life assurance is an essential part of financial planning for many people. It can help to ensure that your loved ones are not left with a financial burden if you die unexpectedly. Knowing that your family is financially protected can also give you peace of mind.
Here are some of the key reasons why mortgage life assurance is essential:
To protect your family’s home:
If you die before the end of your mortgage term, your lender will still expect you to make your monthly repayments. If you don’t have mortgage life assurance, your family may be forced to sell their home to pay off the mortgage.
To provide for your family’s financial needs:
If you die, your family will lose your income. Mortgage life assurance can provide them with a lump sum that they can use to cover their living expenses, such as their mortgage repayments, bills, and food costs.
To give you peace of mind:
Knowing that your family is financially protected in the event of your death gives you peace of mind. This can allow you to focus on enjoying your life and your family without worrying about what would happen to them if you were no longer there.
How to choose the right mortgage life assurance policy:
When choosing a policy, it is essential to consider the following factors:
Type of cover:
There are two main types of mortgage life assurance: Decreasing term and level term.
Decreasing term assurance covers the outstanding balance of your mortgage, which means that the amount of cover reduces over time as you repay your mortgage.
Level term assurance provides a fixed amount of cover, regardless of the outstanding balance of your mortgage.
Level of cover:
Decide how much cover you need. This will depend on the amount of your mortgage and your financial circumstances. It is essential to choose a level of cover sufficient to pay off your mortgage and provide for your family’s financial needs.
Premiums can vary depending on the type of cover, the level of cover, and your age and health. Compare premiums from different providers to find the best deal.
How to get mortgage life assurance:
You can get Insurance from various providers, such as insurance companies. Lenders may provide options for cover, but they may only recommend one insurer.
Alternatively, seek advice from an Authorised and Regulated Independent Financial Adviser. They can search the whole marketplace for the best solution and plan.
Plans can also provide Critical Illness cover. This policy would pay out a lump sum if you were diagnosed with a heart attack, stroke, cancer, etc., so you could pay off your mortgage or make adjustments to your lifestyle.
Mortgage life assurance is an essential part of financial planning for many people. It can help to protect your family’s home and provide for their financial needs if you die unexpectedly. Knowing that your family is financially protected can also give you peace of mind.
If you are considering getting a mortgage or already have one, it is essential to consider getting mortgage life assurance or review your existing plans.