What sort of Life Insurance do I need for a Repayment Mortgage?

You need Mortgage Life Insurance if you have a repayment mortgage.

Mortgage Life Insurance pays off the capital outstanding on your repayment mortgage if you die.

With a repayment mortgage, the outstanding sum owed to your lender is continuously decreasing so the life insurance cover you need similarly decreases. This is exactly what Mortgage Life Insurance provides.

Most Mortgage Life policies include Terminal Illness cover, so if you become terminally ill and are not expected to live for more than 12 months, your policy pays out immediately. If you die, the insurance payout goes either to your next of kin or to your mortgage provider. Consequently, at a difficult time for the family your mortgage is paid off.

If your mortgage is in joint names then you need to arrange a Joint policy (your mortgage lender will probably insist on this).

Joint mortgage life policies are usually written on first life - so if either of you were to die or become terminally ill during the policy’s term, then the policy will be finished, and will not pay out again.

Remember that like all life insurance policies, there is no investment value to the policy. Once the policy has ended then that's it, the same as with car or home insurance.

IMPORTANT:
If you need insurance so your monthly mortgage payments are paid if you can't work due to sickness, accident or unemployment, then you need Mortgage Payment Protection Insurance.

If you want to be covered in case you fall ill with a critical illness (as opposed to a terminal illness or death) then look for Critical Illness Insurance.