Mortgage protection can be set up to make sure that all your outstanding mortgage is repaid should you die. This will help to protect your family and make sure that they have a home. When setting a policy up it will usually be for a predetermined period of years which is often made to finish on the final payment of your mortgage.
In this instance, decreasing term life insurance would be best suited to this type of mortgage. With a repayment mortgage you will pay a certain amount of money each month to your mortgage lender. This will be enough to pay some of the loan and the interest. In the same way as your mortgage repayments decrease, the amount that you are insured for will also decrease until all of your mortgage payments have been met. The premiums for this type of cover are quite low and once the mortgage term has finished the insurance policy will also finish without paying any money.
This is an essential form of life insurance to have if you have this kind of mortgage. It means that should you die during the term of your policy then your mortgage will be paid.
Interest Only Mortgage
If you have this particular type of mortgage then the protection you may require would be level term insurance. An interest only mortgage is one in which you only pay off the interest on your mortgage loan and you will be required to pay the actual loan itself off through a separate plan. With this type of policy the amount that you pay remains consistent throughout the term of the policy. This type of insurance will not pay out should you outlive the policy term.
Other Forms of Protection
It is also possible to protect your mortgage in other ways as well as those listed above. You can purchase additional cover such as serious illness cover in case you have an accident or become ill and are left unable to work or to provide protection if you become unemployed and are unable to meet your repayments.