For most people a mortgage is one of the biggest financial commitments of their life and therefore it is important that adequate protection is obtained against various eventualities. Listed below is a brief summary of the various types of Insurances that can help protect yourself and, or your family, whether mortgage related or not. 

Mortgage Decreasing Term Assurance

Mortgage Decreasing Term Assurance is specifically designed to protect a repayment mortgage.  The cover protects against death in which case it repays the outstanding balance of the mortgage at the time the life assured passes away.  Decreasing Term Assurance can be taken either with or without critical illness cover, in which case the sum assured would pay out sooner if the assured life contracts a critical illness.

Level Term Assurance

Level Term Assurance is again a basic life assurance which can be taken out with or without critical illness (as described above).  The difference between Level Term and Decreasing Term is very much as the name implies – the cover remains level for the specific term of the mortgage.  This means that for a slightly higher premium you receive a better level of cover and as your mortgage decreases if the life assured was to die the full sum assured would be paid out leaving a surplus.  It also means that if you increase your mortgage for any reason you can just top-up the existing level policy.

Family Income Benefit

Family Income Benefit is a policy designed to be used as a very cost effective way of providing a regular income for your dependents if you die within the specified term of the plan, the payments continue for the remainder of the term.  It can be used to cover the costs of the mortgage payments plus any other ancillary outgoings.  You can, of course, take the policy out for additional cover for your family irrespective of whether or not you have a mortgage.

Permanent Health Insurance

To give you a regular income if you suffer illness or injury leading to a loss of earnings.  Your benefit can replace some of the earnings you lose and help to maintain key items of expenditure, including your mortgage commitments, your pension contributions and other items of expenditure you include when you start your Plan.  Additional protection is also available should you become involuntarily unemployed during the agreed term of the plan.  Unemployment insurance can be added to this contract for an additional premium, this would cover you for a maximum of 12 months whilst you seek new employment.  The cover then continues for your new employment and would pay out again if you subsequently were made redundant again, as long as at least six months had elapsed.

Accident, Sickness and Unemployment

Accident, sickness and unemployment can provide cover at a lower cost than permanent health insurance as it provides a reduced level of benefit.  This type of policy pays an income for a fixed term only following loss of income due to either accident, sickness or unemployment and may not be renewable.

Critical Illness Cover

Stand alone Critical Illness cover is also available separate to life assurance to cover the mortgage or the loss of income following the diagnosis of a critical illness.  It is important that you check the terms and critical illnesses covered prior to effecting any policy of this nature as they can vary from life office to life office. 

When taking out a mortgage there are many inherent costs and unfortunately these can not be avoided, however with the correct advice we can ensure that you have the correct policies to cover your mortgage and of course make sure that they are cost effective and affordable.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.

Overall cost for comparison is 9.3% APR

The actual rate available will depend on your circumstances. Ask for a personalized illustration

A fee of approx 0.3% of the loan amount may be charged upon completion, dependant on individual circumstances (typical £295)