Life Insurance For Your Mortgage
A mortgage is usually the largest financial commitment you will take out during your life time. Its purpose is to purchase a house that you and your family can live in. Life insurance is recommended to cover the amount of the mortgage so that if the worse was to happen and an applicant was to die, then the loan would be paid off so that the survivors can benefit from a mortgage free property.
It is essential to analyse the consequences of what position the family would be in if the worse was to happen. It is not a nice thing to think about but it is worth analysing to ensure that the standard of living that a family is used to can remain if someone in the family was to pass away. It is not always the breadwinner of the family that requires life insurance, consideration should be given to the financial consequences of losing any member of the family.
The type of life insurance that you require will depend on the type of mortgage that you wish to cover. If you have a repayment mortgage then a decreasing term assurance would be the most suitable. This type of insurance reduces along with your mortgage as you pay it off, for this reason it is cheaper than a level term assurance. Level Term assurance stays the same throughout the term of the mortgage and is suitable for interest only mortgages where the mortgage amount stay’s the same.
It is important to make sure that your life cover covers the amount and term of the mortgage. When remortgaging you may change the amount or term of the mortgage, at this stage you should also review the life cover to ensure that it is in align with the new mortgage amounts and term.
It is all about making sure that the minor details are right to ensure that you are properly protected at an affordable price.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
There may be a fee for Mortgage advice. The precise amount will depend upon your circumstances but we estimate that it will be £250