Life Insurance

Mortgage Protection Life Insurance

Getting mortgage protection through life insurance

How does mortgage protection life insurance work? I hear you ask, let’s take a look into this for you.

Before we start, statistics from Finder show that 42% of UK households aren’t protected with mortgage protection life insurance. We find that quite shocking. If I asked you the simple question of what would you like to happen to your property in the event of something happening to yourself, what would you say? I imagine most of you would want it passed down to a family member or perhaps very close friend. Now what if I told you I could achieve that for you, mortgage free? That is essentially what mortgage protection life insurance looks to do.

Is mortgage protection life insurance worth it? well, for a nominal monthly fee, the running total owed on your property is covered. In the event that something should happen to yourself or your partner or both, you are covered. This cover is essential if you want to protect yourself against unforeseen events. These events could otherwise unsettle the family and leave them with a debt they can’t afford. Imagine this for a second, you and your wife have been living in a home for years and you are the breadwinner in the family. You get taken ill suddenly and pass away within three months with no savings but a mortgage outstanding. How is your wife going to fund that? She will already be grieving for your loss. It would be crippling for her to face a mortgage bill she can’t pay. This is where mortgage protection life insurance is so important.

The different types of mortgage protection life insurance

Let’s look at mortgage protection life insurance for your property. When it comes to protecting the mortgage you can have different insurance products. Generally these are increasing, level or decreasing term insurance. Increasing means the level of cover goes up with inflation generally to make sure you are getting the right amount of money throughout time. Level means it stays exactly the same. So if you have an outstanding mortgage for £350k on a 25 year term, level term insurance means that you will always be insured for £350k. So even if your mortgage is near the end and you perish, you will still be paid out £350k. 

Level term insurance is slightly more expensive than decreasing but gives you a buffer of money that can be really helpful for the minimal extra cost. Decreasing term goes down as you pay the mortgage off. So if you had a 25 year term £300k mortgage, it tracks the amount insured in line with the total outstanding mortgage. This would only work for a capital repayment mortgage. Level term is suitable for interest only mortgages as the capital doesn’t decrease over time.

Adding critical illness cover on top of your mortgage protection life insurance

Critical illness cover works in a more inclusive way than mortgage protection life insurance. It pays out on your insurance when you are diagnosed with an illness that is listed on the insurers list of ailments. This meaning if you survive your illness, you still get the payout. Insurers will pay out on diagnosis of the ailment. This works in contrast to mortgage protection life insurance which pays out on death only. 

This helps a lot in the current climate as improved medical care is seeing more people survive serious illness. This way you can have the financial peace of mind to put all your energy into recovery from your illness. Although this can be seen as a relatively expensive extra, it gives you a lot of added security. 

Comparing the market of insurers

Well, you are in luck on this one. We have access to all the insurers on the market, all of which have different plans, policies & events they do and don’t cover. Meaning we can get you the best mortgage protection insurance money can buy. With our access to this we can assess your needs and advise appropriately. Firstly we will compile a full financial fact find on yourself so we have the required information to take to insurers. Once we have all of this we will have a discussion of where exactly you have gaps that could be filled with the correct insurance. In this case, mortgage protection life insurance.

All of our insurance advice and process is FREE of charge so there is no fee to pay to us for carrying out applications on your behalf. We shall then look at the correct insurance packages we feel that will cover you appropriately. Once we have looked at all the avenues we will get you illustrations that detail what insurance we recommend to cover you. You then take this away, look it over and discuss with us if necessary. We are always happy ot talk them over and explain any areas that you don’t understand. 

Proceeding to application and getting your insurance in place

You’ve looked over the insurance package and decided you want to go ahead. We will require you to sign a client agreement which signifies you wanting to go ahead with our service. As mentioned earlier, there is no fee for our insurance advice and application. We will now proceed to the formal insurance application with the insurer. What happens next with mortgage protection life insurance is a lengthy form that asks every in and out when it comes to your personal health, history of health and your families history of health.

The reason for this is they want to assess your suitability for their given life insurance product. Once they have all of this information their underwriters will look over it all and either give an acceptance on standard terms, meaning you are okay to have the insurance, or will ask for more information or a doctors examination. If they ask for the examination you will need to get a doctor to assess your health. They will then write their report up and give it to the insurer who will evaluate. 

Upon evaluation they will either change their terms, for example, meaning you have to pay extra due to higher risk. Or reject the application. To avoid getting to this stage we would normally ask about health issues prior and match you up with an appropriate insurer. This is the process of getting mortgage protection life insurance.

Other insurance cover to consider

There are a lot of circumstances you can cover yourself for with insurance aside from self employed sick pay. Whether that be providing the family with an income using insurance. Buildings and contents is also something we advise on with 5 star rated products. And we also look at life insurance that can be placed in a business, we call this key man cover. We can also look at covering you if you are off work sick for a long period of time. There are many avenues you can go down but the best thing about our insurance advice…

Is….

Our advice on insurance is FREE. We take a look at your situation and will process an insurance application FREE of charge. Just in case you didn’t get the message that means you pay ZERO for this advice. Pretty good, right?

Get in touch with us to discuss your situation and need for insurance to protect yourself or your family.

Please do be advised as well that we also cover the full remit of financial advice including pensions, investments & mortgages.

Regulatory Statements

True Advice Financial Services is a trading style of TA and SE Hollom Ltd. Which is an Appointed Representative of New Leaf Distribution Ltd. Which is authorised and regulated by the Financial Conduct Authority : Number 460421.

Registered Office : 1st Floor Princess Caroline House, 1 High Street, Southend on Sea, Essex, SS1 1JE.