Buying a house is one of the most thrilling decisions that you will ever make. The feeling of walking into your new home for the first time is something that will linger long in your memory.
Yet, worries about all the practical matters it involves, such as mortgage life insurance, can make this event more of a hassle than you would like it to be. You will want to enjoy this phase of your life as much as possible, so it is important to find out everything you need to know about these matters as soon as you can. To begin, ask yourself 'do I need life insurance for mortgage?'. Below we outline some of the points that might help you answer it.
Fortunately, getting mortgage protection through a life policy is a fairly straight-forward matter that you can quickly get to grips with by understanding a few basic points. First of all, do you need mortgage life insurance to start with, and if so why?
You will typically be asked to take out some form of mortgage insurance cover when you take out a mortgage to buy a house. In some cases this may not be needed if you are putting down a large deposit and only borrowing a relatively small amount of the value of the property.
This live cover lowers the risk that the bank is taking, as they know that if the worst happens the loan will be paid off upon your death.
However, if the bank or other financial institution that loans you money doesn’t require you to take out life cover then you should still consider your own situation and whether it would be best to take out life insurance to protect your family. In this way, they don’t have to pay off the loan and might also end up with a lump sum to help them out financially.
You may hear mortgage payment protection being mentioned and wonder if this is the same thing as mortgage life insurance. The fact is that this is something completely different, although it can be just as useful when the right policy is taken out.
While mortgage insurance will pay out on your death, mortgage payment protection is designed to cover you if you are unable to pay the monthly payments. This can be because of illness, injury or, in some cases, redundancy.
If any of these things happen then the policy will pay your mortgage for you each month that you are unable to, up to a set limit.
You will be pleased to see that type of important protection doesn’t tend to be very expensive at all. Obviously the exact price you are quoted will depend on factors such as your age, your health and how much the mortgage is for.
However, most people find that this type of life cover isn’t particularly expensive to arrange. This is particularly important considering that you probably have a number of other big expenses to pay for at this time.
If the mortgage is in both names then you may prefer to take out life cover in both names. Of course, some people like to just cover the main earner in the house as it is their salary that effectively pays the repayments every month.
Yet, it is also worth considering the financial impact of losing a partner who doesn’t work or earns a lot less than you. This can still be a huge financial blow that puts the mortgage in risk, so getting life insurance to cover mortgage commitments if they weren’t around makes a lot of sense.
You might initially think that being asked to take out life cover for your mortgage is an expensive burden. Yet, once you look into the matter you will see that it isn’t too expensive and is also very worthwhile for the peace of mind that it gives you.
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Do you need life insurance for mortgage? Depends, but grab your free quote now and decide for yourself!