There is nothing more important than protecting your family financially when you no longer can. A life insurance policy could help to pay for your funeral, pay debts, rent or a mortgage and leave your loved ones financial stability. Despite this many UK residents don't have the right life insurance in place.
What is mortgage life insurance?
Mortgage life insurance is a type of life insurance which is put in place when you take out a mortgage. It is usually set to clear the mortgage as a minimum if you pass away so that your family can keep the house.
Mortgage protection life insurance is commonly decreasing term life insurance which means that you take the cover out for the mortgage balance and the amount falls as your mortgage falls.
You can still look at a level policy where the payout amount stays the same for the life of the mortgage. As you pay off the mortgage, this will create a surplus for you to leave for other expenses.
Do you need life insurance for a mortgage?
If you want your family to keep the house if you pass away then you should put life insurance for the mortgage in place. A lot of families wouldn’t be able to afford the mortgage if one of the incomes is lost from the household. Mortgage protection insurance is life insurance to pay off the mortgage so your family don’t have to worry financially.
Mortgage protection insurance can be put in place if you would like someone to inherit the house, even if they don’t currently live with you. Mortgage protection life insurance can be used to pay off the mortgage so you can leave someone the house debt free. This protects your hard earned deposit and leaves an asset for your family.
Life insurance vs Mortgage Protection
Life insurance for a mortgage is often referred to as mortgage protection. The amount is often targeted around covering a mortgage but otherwise the cover is the same. When looking at protecting your mortgage it is also important to consider illness cover which will protect you while you are alive and living in the house.
Do you have any family or a partner?
If you have children who are financially dependant or grandchildren, you should take this in to consideration.
Even if they are not financially dependant on a day to day basis. Consider if you would like to leave them some inheritance or financial support
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Mortgage or debts
If you own a house that still has a mortgage on, you will need life insurance to leave this to them debt free. If you life in rented people you could 6-12 months rent to give their families chance to sort their belongings. People usually make sure that any debts they have are also covered by their life insurance.
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The Cost of Your
Funeral
The average cost of dying in the UK was £9200 in 2022***. At a time when your family are grieving, you don’t want them to be worrying about this expense.
How much life insurance do I need for my mortgage?
Mortgage protection insurance usually looks to clear your mortgage balance if you pass away. You can also factor in other expenses such as funds to raise children, household bills or anything else that you would like to leave.
What is the average cost of life insurance per month UK?
Life insurance can cost be from £5 per month. The cost of your life insurance varies based on things such as your age when you take out the policy, your health, the amount of cover and how long you would like the cover.
What is the average life insurance payout UK?
In 2022 a total of £3,907,342 was paid out in life insurance claims in the UK with the average claim at £73,578***