Life Insurance To Cover Your Mortgage

Taking out a mortgage is often the biggest financial commitment you’re every likely to make – and your home is the security against the loan. So how do you make sure that your home is protected if something happens to you?

Mortgage Protection is a form of life insurance policy that decreases over time in line with your mortgage balance and is designed to pay out a lump sum to pay off the remaining amount if you die or suffer a critical illness (depending on the type of cover chosen). This means you are able to protect your family’s home should the worst happen.

What is Mortgage Protection?

One of the more commonly heard of life insurance products is Mortgage Protection. A Mortgage Protection life insurance policy can be arranged in many ways, whether this be cover that pays out in the event of death, upon the diagnosis of a specified critical illness or a combination of both.

Mortgage Protection is designed to provide life or critical illness cover to the meet the amount of your mortgage, meaning for every  monthly payment that you make on your mortgage,  the level of cover that you have will decrease in line with your remaining mortgage balance.

This means that should you pass away or suffer a critical illness, you will have the funds to repay your mortgage, keeping your family secure in their home as well as reduce your financial outgoings should you be unable to work long term.

These types of policies can be more cost effective than stand alone life and critical illness cover, as the sum assured decreases over time rather than guaranteeing a fixed lump sum pay out.

Mortgage Protection is a great cost-effective way to provide some financial security for yourself and your family, and we often advise our clients to look at a Mortgage Protection policy in combination with other life insurance solutions such as income protection or family income benefit.

Whatever your situation, FOCUS are committed to having a down to earth conversation about your needs, finances and current situation to find the most appropriate solution for you. Having the right life insurance cover in place means that should the worst happen, you and your family’s financial needs are taken care of.

Mortgage Protection Life Insurance questions

Mortgage Protection – otherwise known as decreasing cover, is a life and/or critical illness policy that is designed to repay your mortgage in full if something happens to you. The amount of cover decreases over time in line with the monthly payments that you make and your reducing mortgage balance.

It is not the same as mortgage payment protection insurance

Key benefits of Mortgage Protection Life Insurance

  • Tax free lump sum payment in the event of death or upon diagnosis of a specified critical illness (subject to cover type selected).
  • Options to add ‘Total Permanent Disability’ meaning should you become permanently disabled through an accident or illness not named in the policy wording, the policy will still pay in full.
  • Options to add ‘Terminal Illness Benefit’ – when combined with a life policy, a terminal diagnosis of 12 months or less will result in a full pay out.
  • Options to be able to include children on the policy from birth to age 21 (dependent on higher education attendance).
  • Hospitalisation payments to help offset the costs of long hospital stays such as parking, meals away from home and hotel stays.
  • 24/7 Access for you and your immediate family to telephone and video chat consultations with GPs that can provide prescriptions.
  • Specialist nurses to provide in-home care, bereavement counselling and support to your family.

The plan will have no cash in value at any time and will cease at the end of the term. If premiums are not maintained, then cover will lapse.
The policy may not cover all the definitions of a critical illness. For definitions please refer to the key features and policy document.

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