Guide to Decreasing Term Insurance also known as Mortgage Life Insurance
Why should you buy Life Insurance?
Life insurance is designed to protect individuals and families by paying out a lump sum, also known as the sum assured, on the policyholder’s death. Where the policy is for a couple, it can be written in joint names and would usually be set up in such a way that the sum assured paid out on the first death. This lump sum can then be used to provide for and help secure the surviving family’s future by funding any outstanding financial obligations like loans and mortgages and maybe leave additional monies to support your loved ones.
What is Decreasing Term Insurance/Mortgage Life Insurance?
Decreasing term insurance, sometimes referred to as mortgage life insurance, can be designed to cover the loan on your outstanding mortgage where it has been set up as a repayment loan where both capital and interest are repaid over the mortgage term. The amount of capital you repay from your mortgage does not reduce uniformly throughout the term. In the early years, most of what you repay goes to cover the interest element with only a small amount of capital being repaid. As the mortgage term progresses this shifts around, with most of the repayments being capital and only a small amount being interest to as the mortgage nears the end of the term. Because the sum assured decreases throughout the term the premium can be a little lower than that of other life insurance products because you are only paying for the cover that you need. At the end of the term, the policy ceases and there is no cash value to these policies at any time.
Important things to remember: As for any life insurance this type of policy will be underwritten which means that you may not be eligible if you already have health problems. This may also affect the level of premium. There may also be exclusions if you do activities such as risky sports. You should look at the product details for each provider. Please note that receiving a quote via comparethemarket.com does not guarantee that an insurer will accept you for the policy.
How to get a Mortgage Insurance policy through comparethemarket.com
Click to get a quote and select either decreasing mortgage life insurance or decreasing mortgage life insurance and critical illness cover. Fill in a few personal details on the form and click to get a quote. You’ll then be taken to a price comparison screen where you can compare prices from a number of different Insurance companies and choose the best policy for you.
Shopping for your mortgage life insurance has never been easier! A couple of minutes and one simple form and you could be comparing life insurance all from the comfort of your own home!
Important things to Remember!
Some mortgage life insurance policies cannot guarantee to pay out if interest rates were to rise beyond certain levels, usually around 9%. It is important to check your policy details to make sure that you are covered.
If you were to lengthen your mortgage term or defer payments then your mortgage life insurance policy may be reducing at a higher rate than your mortgage, which means there would still be an outstanding loan in the event of a policyholder’s death during the term.
If you are in any doubt as to whether this product is suitable for you, you should consider seeking independent financial advice.
More Information…
If you would like more information about getting a good deal on life insurance or the different products that you can buy, then visit the comparethemarket.com your insurance section for more information.
Have a look at how much you could save with your life insurance and compare with comparethemarket.com today!