The two main reasons people take out life insurance are:

1/ Family

2/ Mortgage

Mortgage life insurance also provides protection for the surviving family. With the mortgage cleared the family can remain in their home without having to struggle to pay the bills on the income of the survivor.

If the survivor is a housewife with no income, mortgage life insurance is of the utmost importance.

If your partner died and you were left with the grief and heartache of losing a loved one there would be some comfort in knowing you didn’t have to worry about the possibility of losing your home as well.

Would you not also want to know your family would be OK if anything happened to you?

Mortgage life insurance can be tailored in several ways.

‘Level’ Life Insurance – provides a fixed amount of cover for the whole term. i.e. 25 years. This is the most suitable option for ‘interest only’ mortgages because the loan amount does not go down.

It is possible to have ‘level’ protection for a ‘repayment mortgage’ and as the mortgage goes down over time the amount of cover stays the same. This creates a surplus of cover in the later years of the mortgage which can provide additional benefit to the family.

‘Decreasing’ Life Insurance – provides a decreasing amount of cover which reduces over time like a repayment mortgage. Some insurance companies provide a ‘guaranteed mortgage payment’ option but not all ‘decreasing’ policies guarantee to clear all of the remaining mortgage.

Although mortgage life insurance is intended as mortgage protection it is entirely possible to have more cover than the outstanding mortgage as additional protection for the family.