Mortgage Life Insurance

Mortgage life insurance is taken to safeguard the mortgage that you have bought even after your death so that your family continues to enjoy living in the home you bought. This is because the sum of money left to pay the mortgage loan is paid off by the mortgage insurance company. Mortgage life insurance is of two types; Mortgage level term assurance and Mortgage decreasing term assurance. In mortgage level term assurance the premium and the coverage amount that is chosen while taking the policy will remain the same and will change only when you alter the policy. In this the company pays out cash sum if the insured dies during the term. Mortgage decreasing term assurance is a policy in which the amount covered in the policy decreases as the mortgage amount decreases. The cover amount equivalent to the remaining mortgage is paid to the beneficiary by the company.

Well! You must be wondering as to why it is referred to as life term assurance and not insurance. Assurance is something which is sure to happen and insurance means there is risk of it being happening. Many of them do call it insurance as well as there is no guarantee that the insured will die within the term period. For mortgage life insurance the non-smokers are bound to pay much less when compared to smokers. The reason is obvious; smokers are more likely to die within the term than the non-smokers. The mortgage term insurance is available at a premium as low as GBP6 and the final premium amount will depend on the policy that you take, term of the insurance and the coverage amount.

When taking up a mortgage life insurance one should know certain things like, this policy is not an investment or saving and you will not get any cash value until unless a valid claim is made for the same. The insured would like that the term and the cover of the policy match the mortgage for which you have taken the insurance. Before taking up any policy one should read the document and the terms and conditions carefully. Check for a policy that allows you to add critical illness coverage and maximum number of these diseases. Mortgage life insurance is of great importance as it protects your house from being taken away from your family in case of your untimely death. It is said that “Better safe than sorry”.