Taking out life insurance may not be a legal requirement if you have a mortgage, but it certainly is sensible to have.
The benefits
Not only does life insurance provide financial security in a hypothetical future, but it may also offer you some peace of mind knowing that your loved ones would be able to stay living in their home without debts to pay off.
Who needs it?
Regardless of your circumstances, life insurance is advisable for all mortgage holders – whether you’re a first-time buyer or moving up the property ladder and taking on a larger mortgage. Even those who are currently single with no dependants should consider it, as circumstances could change in future (e.g. by getting married or becoming a carer for a family member).
Types of life insurance
There are two main options to consider – decreasing term or level term life insurance. Decreasing term is often used by those with a repayment mortgage, as the potential payouts decrease over time to reflect the amount left to pay on the mortgage. With level term insurance, you decide how much cover you want, and your loved ones will get the full payout if your death occurs within the term. Unlike decreasing term, level term life insurance can cover the costs of more than just a mortgage.
We can advise on the most suitable protection for your unique requirements.
