For most people their mortgage payment is their largest monthly cost. It is therefore essential that you consider the financial impact on your family if you were to pass away, leaving a large debt such as this. Mortgage protection insurance, or Decreasing Term life insurance, is designed to provide a lump sum to pay your mortgage balance in the event of your death.
In this article we have collected our Top 5 Things To Think About Before Taking Out Mortgage Protection Insurance.
"Protect your family from having to leave the family home."
1. Understand the terms of your mortgage and the mortgage protection insurance policy before signing anything. - Did you know a lot of mortgage lenders won't borrow you the money to purchase your home without signing up to some form of life insurance or Mortgage protection insurance! This ensures payments will always remain even if the worst were to happen. Make sure you fully understand the terms of your mortgage and your mortgage protection before signing up and ensure this is the right options for you.
2. Make sure you understand why you need this or why this is a viable option to protect you and your family. - For many families throughout the UK the mortgage payment is the most expensive out-going every single month and this is why a lot of families struggle to maintain the payments every month. Now imagine if you were to pass away, could your loved ones keep up with the payments and remain in the family home?
3. Make sure you understand the details of the policy - Such as the premiums and how long the coverage will last. Making sure you read and fully understand everything in the terms & conditions goes without saying, but many people still dont do this. Now imagine your family are in the situation where they need access to your insurance and they DON'T qualify.
4. Understand the difference between Mortgage Protection Insurance & Life Insurance. - Mortgage protection insurance can also been know as Decreasing-Term Life Insurance. This is designed to pay out a lump sum if you were to pass away that decreases over time. As mortgages reduce as you make monthly repayments, the life insurance benefit will do the same. For example, at the start of the policy the benefit may be £250,000, the same value as your mortgage. After 10 years of repayments, the benefit may be £150,000, matching the amount you have left to pay on your mortgage. Whereas Level term life insurance pays out a set amount if you pass away during the term of the policy. For example, when you are insured for £100,000 over 25 years, you would receive that amount were you to pass away at any time during the duration of the policy.
5. Speak with a financial advisor - This will better your understanding of the implications of taking out a mortgage protection insurance policy. We totally understand when it comes to the topic of insurance there is a lot of information out there and a lot can be miss-leading. That's why our friendly advisors are on hand to help you every step of the way. Contact us here and find out how we can help you today or if you have any questions on the right cover for you.
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To get your Mortgage Protection insurance quote today and contact our friendly adviser team here. Or call us on 0333 188 7617.
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