Life Insurance Cover
Protect your loved ones when they need it most
Taking on a mortgage is a long term financial commitment. Ensuring you and your family are fully aware of all the risks associated with taking on such a commitment is as important to me as ensuring you have the right mortgage is.
Ensuring you and your family can stay in your home should the worst happen is at the heart of my advice
Life insurance is a plan designed to pay out a lump sum in the event of the person being insured passing away during the policy term. This is paid out tax free to your next of kin or trustees if the plan is placed in trust. This lump sum can then be used by your dependents in any way they chose, though typically this when taking with a mortgage will be used to repay the mortgage.
Depending on your own needs and circumstances life insurance can be taken out in two ways.
The first is called a "Decreasing Term Basis". This is a policy that, over the term of the policy, will reduce each year. This type of life insurance is typically taken to run alongside a repayment mortgage. As the amount of cover paid out reduces each year this is usually the cheaper of the two ways of arranging a plan.
The second is known as "Level Term Basis". Unlike the above the amount of life cover taken never reduces throughout the term of the plan. Typically these type of policies are taken to run alongside an interest only mortgage as the amount required to repay your mortgage loan does not reduce.
In either of these options your premiums will also normally come with a couple of options. The first been "Guaranteed", that is the premiums agreed once medical underwriting has taken place do not change at any stage in the term of the policy. The alternative to these type of premiums is "Reviewable Premiums". Reviewable premiums are changeable throughout the term of the policy. Whilst they may be cheaper at the outset, there is no guarantee that will always be the case, similarly there is no guarantee they will change at all and if they do change that may be a downward change, making your premiums cheaper.
All life insurance will be subject to medical underwriting to determine the level of cover available and the premiums that will apply.
As with all insurances policy exclusions and conditions will apply.