Also known as decreasing term assurance, but what is it?
When buying a home, you should consider mortgage payment protection insurance. Decreasing Life Insurance is designed to pay off your repayment mortgage if you die or you're diagnosed with a terminal illness with a life expectancy of less than 12 months, during the term of your plan. It could pay out a cash sum. The sum assured should initially match your mortgage balance and then it gradually reduces over the term roughly in line with your mortgage.
You have the option to take out a policy in joint or single names and you can pay your premiums monthly or annually.
For some homeowners, mortgage payment protection insurance can be a great safety cover while for others, it might be just an added expense that will drain the budget.
Whether to buy or not buy, a mortgage insurance policy depends upon your current financial situation.
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You normally have the option to add Critical Illness Cover at an extra cost when you take out these types of plans. Critical Illness Cover is designed to pay out if you are diagnosed with one of the specified list of critical illnesses that the provider covers during the term of your policy and you survive for 14 days from diagnosis.
According to the Association of British Insurers (ABI), all critical illness policies cover the following illnesses, providing they are of a certain severity:
- heart attack
However, mortgage payment protection insurance varies between insurers and most policies include additional medical conditions, so please make sure you compare between providers.
For any query, feel free to get in touch with our mortgage team.
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