Which is the best mortgage protection insurance?
Looking for the cheapest mortgage protection insurance, is straight forward but there are many different elements to consider, such as the monthly wage into the household, especially if you have children. Without insurance in place how quickly would this impact your family. A decreasing term mortgage protection insurance policy is one of the cheapest protection policies, meaning that you may be able to afford a wider range of insurance to cover you for any number of unforeseen events in the future, whether it be health insurance, income protection or unemployment.
What is decreasing life insurance?
Decreasing life insurance is also known as mortgage life insurance. It is a type of type of term life insurance which decreases over time and is designed to help your loved ones pay off a mortgage or similar long-term loan if you die during the policy term.
How does decreasing life insurance work?
As the name suggests, the cover you take out reduces over time at a set, predetermined rate. This is to account for you steadily paying off your repayment mortgage and therefore reducing the overall outstanding debt as time goes by. This means that if you die during the beginning of your decreasing life insurance term, your family will receive more money than if you died towards the end of the term.
The premiums for this type of life insurance remain the same throughout the term of the policy if the premiums are guaranteed. The cover you receive gradually reduces over time until it reaches £0, and the aim is to time the decreasing life insurance policy with the repayment of your mortgage. This way, if the worst were to happen whilst you are still paying off your mortgage, your family would not need to worry about making the mortgage repayments.
As the amount of cover reduces over time, this type of life insurance is usually a cheaper option than other life insurances which provide the same level or increasing cover throughout the term.
Do I need decreasing life insurance?
There is no legal requirement to have mortgage protection insurance if you have a mortgage. However, if you have loved ones that depend on your income, it is worth considering protecting them in case you die during the term of your mortgage. This way, you can be safe in the knowledge that they will not be left with the responsibility of having to pay the mortgage. If your family cannot keep up the repayments, they may be forced to sell their home.
How much does decreasing life insurance cost?
Decreasing life insurance premiums are determined by factors such as your age, lifestyle, general health, and the amount of cover. If you are young and in good health, then the premiums are likely to cost less that someone who is older or with who has health conditions.
People with health conditions can still get life insurance although it may be harder to find and cost more, the insurer may load the premiums depending on your medical history, typically this could increase your monthly premiums by between 25% – 100% but could be higher. At Woodward Financials, all our independent financial advisers are able to access the whole of the market and find the best life insurance for your needs and could be the cheapest.
Things to consider before taking out mortgage protection insurance
There are many important decisions to make when taking out mortgage protection insurance and some of the questions you should think about are:
- How much insurance cover do I need?
- How long do I need the term to run for?
- Do I have any existing policies in place already?
Woodward Financials were awarded best wealth management firm in 2021 and again in 2022 and have a team of advisers ready to help you answer these questions and guide you through the right whole of life insurance policy for you and your family.
It is very important to speak to an independent financial adviser when planning your family protection insurances, you may feel mortgage protection insurance is all you need, but what if you have a car accident, this policy will more than likely not benefit you if you survived the accident, what if you become ill and your contract of employment meant that your salary would be reduced by 50% or worse down to statuary sick pay, only to wish that you had an income protection policy in place, we can work out the best blend for you and if budget is an issue we can focus on the priorities for your current needs.
Mortgage protection insurance also goes well with Family income benefit insurance and critical illness
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For more information you can contact David on 01753 839348 or email davidwoodward@woodwardfinancials.co.uk