life insurance

Life Insurance: Mortgage Protection

Compare Mortgage Protection Life Cover

Mortgage Protection Life Insurance can help care for your family's financial situation by paying off the outstanding balance of the mortgage on your home.

What is Mortgage Protection Life Insurance?

A mortgage protection life insurance policy is designed to pay off the outstanding balance of your mortgage if you die during the term of the policy. It is designed for people who wish to ensure that their dependants are given the financial stability of knowing their mortgage is taken care of should the worst happen.

When you take out the policy, you choose the amount of cover and how long you would like the policy to be in force (the term). The cover amount will decrease over the term of the policy in line with the outstanding balance on your mortgage.

For Example...

If today you have an outstanding mortgage balance of £150,000, and your mortgage has 20 years before it will be paid off, in 10 years time that outstanding balance will have reduced to around £95,000.

The amount payable on your mortgage protection life insurance in the event of a claim will have reduced to a similar amount:

decreasing cover example

You pay a monthly premium for the entire term of the policy. If you stop paying the premium then the cover will lapse.

At the end of the policy term there is no cash in value. If the policy term is reached without a claim being made then the policy will not pay out.

Will my Premium Change over Time?

Most of the policies we sell have guaranteed premiums which means that the monthly premium will remain the same over the entire duration of the policy. However if purchasing a policy with Critical Illness some policies quoted may be 'reviewable.'

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With a reviewable policy the premium payable will be reviewed by the insurance company at set periods (often every 5 years).

If you choose a reviewable premium the cost at the outset may be less but the premium may rise over time.

How Much Cover Should I Choose?

The amount of cover you choose is normally the same as the outstanding balance on your repayment mortgage. If you have an interest only mortgage or are looking to help your family financially in ways other than paying off a repayment mortgage then you may wish to look into the features and benefits offered by a level term life insurance product.

Can I Take Out a Joint Policy?

joint livesA mortgage protection life insurance policy can be set up to cover a single life, insuring one life for a selected term, or as a Joint life plan where the sum insured is payable on the first loss of either life.

The policy will only ever pay out once, so depending on your circumstances and who you wish to protect financially it may suit your circumstance better to buy two single life policies.

What is Critical Illness Cover?

Critical Illness is a benefit which can be added to most mortgage protection life insurance policies for an increased premium.

Can I add Critical Illness Cover to my Policy?

It can be added as either an integrated benefit, where in the event of the diagnosis of a specified critical illness the cover amount is the same as the cover amount for death claims. If a claim is made then the policy will cease and no further claims will be made.

Alternatively you can add critical illness as an independent benefit, this way you can choose a different amount of cover to that paid out on death. With independent critical illness cover if a critical illness claim is made then the death cover still remains in place and a further claim can be made in the event of the death of one of the lives assured.

For more information view our critical illness page.

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If you are replacing an existing policy please ensure you do not cancel your current arrangements until your new policy is in force.

Summary of Cover

This is a general overview of the cover available, please read the insurance company's product key features for the specific cover and terms and conditions that apply.

  • You decide on a sum insured and a term of years from the outset.
  • The plan has no investment content.
  • The sum insured reduces each month during the term in line with a standard repayment mortgage.
  • The plan is designed to pay a sum of money that will be equal to the outstanding capital amount under a standard repayment mortgage.
  • If you die during the specified term then the sum insured is paid out.
  • Can be set up as a single life plan, insuring one life for a predetermined sum insured and term.
  • May also be set up as a Joint life first death plan where the sum insured is payable on the first death.
  • Critical Illness benefit can be added to most plans.
  • As soon as the sum insured is paid out the plan ceases. If you survive the term and the sum insured has not become payable then the plan ceases and nothing is paid out as this product has no cash in value at any time.
  • If you are replacing an existing policy please ensure you do not cancel your current arrangements until your new policy is in force.

Can you Help me Choose a Product?

We arrange life insurance on a non-advised basis - this means no advice is given or implied.

Some documentation from insurers may include wording stating that theidol.com is your financial advisor, however this is a general term used by the insurers. Our terms set out in the Our Services document confirm life insurance is arranged on a non advised basis only.

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