Mortgage Life Insurance
What is mortgage life insurance?
Mortgage life insurance provides customers with an insurance policy that will pay off their mortgage should they lose their life during the term of their policy.
Mortgage life insurance gives customers and their families with peace of mind that should the worst happen to the main earner in the family, the mortgage will be paid off and the family will have somewhere to live for the rest of their lives.
Mortgage life insurance works in much the same way as a normal life insurance policy but covers just the mortgage of a customer, and does not pay out a lump sum payment like most life insurance policies will.
How does mortgage life insurance work?
Mortgage life insurance is one of the simplest forms of life insurance, and simply provides customers families with a payment that will pay off the mortgage in full. As a result, most mortgage life insurance policies are cheaper than standard term life insurance policies because as the customer gets older, and the risk of them dying increases, but at the same time, the value of the outstanding mortgage decreases, meaning the payout the insurance company will have to make gets smaller all of the time.
Why do I need mortgage life insurance?
A customers mortgage is quickly growing into the single biggest payment they will have to make each month, especially now house prices have stopped increasing and customers looking to get onto the ladder are faced with mortgages which represent as much as ten times their annual salary, compared to the relatively small mortgages taken out be the same generations parents.
Many customers see as much as 50% of their household income go straight back out to their mortgage provider each month, leaving their mortgage as the single biggest financial worry should they die tomorrow and not be able to earn money to pay towards it. With many families now having two full time workers, the salary of one worker is often enough to provide for basic household bills and living, so the mortgage is all that is needed to be protected, and mortgage life insurance provides the perfect solution.
Mortgage life insurance is also cheaper than term life insurance, and is far cheaper than whole life insurance, although it does offer a very different amount of financial coverage, particularly later in the term of the mortgage and the life insurance term.