Should I get Mortgage Life Insurance instead of Life Insurance?

If you have a Repayment Mortgage and just want insurance to cover the mortgage - then choose mortgage life insurance.

If you have an Interest Only Mortgage, then you need level cover Life Insurance.

Mortgage Life Insurance is a form of insurance specifically designed to work with a Repayment Mortgage because your sum insured decreases at the same time as the decreasing capital owed on your mortgage. So if you died, your mortgage would be fully paid off - nothing more, nothing less.

Because the cover is decreasing continuously, it is a cheap form of life insurance, and is sometimes called low cost life insurance.

Terminal Illness cover is also included in most Mortgage Life Insurance policies, as with all standard life insurance policies, so if you are diagnosed with an illness from which you are expected to die within 12 months, your mortgage will be paid off in full.

Most Joint Mortgage Life Insurance policies are written on a first life basis, so if one of the policyholders dies, the insurance policy will pay out and terminate. Consequently, the surviving partner will be uninsured, however, the mortgage will be paid off.

If you have a joint mortgage then both names on the mortgage must also be on the insurance policy.

If you would also like to cover your monthly mortgage payments in case you can’t work due to illness, accident or unemployment - take a look at Mortgage Payment Protection Insurance, also available through this website.