Mortgage life insurance
Mortgage life insurance is a type of life insurance policy where the size of the payout will decrease as the term wears on. This means that the cash payout your dependents would receive upon your death reduces by a set amount each year until the end of the term.
The "term" is the number of years you decide to take out cover for, and can be anywhere between one and 40 years in length.
Mortgage life insurance is sometimes referred to as decreasing term life insurance or mortgage protection insurance.
The cost of your premium
Mortgage life insurance is typically cheaper than level term life insurance, where the size of potential payout will not change as the term progresses, but the cost of the premium you pay each month will depend on the amount of cover that you want, your age and your health.
Joint or single cover?
When you buy mortgage life insurance you can choose either single or joint cover. Joint cover is usually cheaper than buying two single policies and can provide a payout for either you or your partner, but will only pay out once, for the person on the policy who dies first.
Critical illness insurance
Critical illness insurance could pay out a lump sum if you contract a serious illness that is covered by the policy. You can buy critical illness insurance as an add-on to your life insurance policy.
How to get mortgage life insurance
Don't just go with the first provider you see – comparing quotes could save you money and help you to find the best cover for your circumstances.
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Last updated: 03 June 2015