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Mortgage Life Assurance is used to protect your mortgage against the risk of you dying and leaving it behind for your family to continue paying.
There are two types of cover Decreasing Life Assurance & Term Life Assurance.
Decreasing Life Assurance is most suitable for mortgages which are Capital Repayment, this is because the level of cover is designed to reduce as your mortgage reduces over the years. The reduction ensures that there is always enough in the 'pot' to pay off the mortgage if the worst happens but there will be very little surplus remaining.
Term Life Assurance is the opposite of Decreasing Life Assurance in that the amount of cover remains the same throughout the term of the policy and does not reduce. This type of Life Assurance is suitable for those people with interest only mortgages, and also those wanting to leave a sum of money behind to ensure their family's standard of living.
Types of Cover
Level Cover
Helps protect your cover against the effects of inflation, giving added protection for you and your loved ones.
- Cover remains the same throughout the term of the policy
- Premiums calculated when you take out the policy, and stay the same for the duration of the policy term
Decreasing Cover
Helps to pay off debt that's reducing over time, like a mortgage.
- Cover amount decreases each month broadly in line with a repayment loan using a fixed interest rate
- Premiums calculated when you take out the policy, and stay the same for the duration of the policy term