Why have a mortgage life insurance policy ?
Mortgage life insurance is designed to cover your mortgage. Should you die during the length of the policy then mortgage life insurance can help you to pay off your mortgage. If you have a family then this is particularly important and can help provide you with some peace of mind knowing that this will all be taken care of. You may also hear this type of insurance referred to as mortgage cover, mortgage life assurance and mortgage protection but they all do much the same job.
The main reason that having a mortgage life insurance policy is vital is that it means that any dependents that you have will not have to worry about repaying the mortgage. This type of policy will pay off any debt left on repayment mortgages should you die during the policy. If you have an endowment mortgage then you will probably not need this type of policy as the life assurance is included within the endowment. However, it is worth checking this all thoroughly first to make sure.
Mortgage term insurance
With this type of insurance the amount that you are insured for will be the same throughout the term of your mortgage life insurance policy.
Mortgage decreasing term insurance
With a mortgage decreasing term policy the amount will decrease during the length of your mortgage life insurance policy. This protects a repayment mortgage as the amount of insurance decreases at much the same rate as your remaining mortgage debt.