Why is Mortgage Life Insurance cheaper than normal Life Insurance?

Mortgage Life Insurance is a particular type of insurance designed specifically for people with a repayment mortgage.

STEP 1 of 2
Type of cover
Life Insurance       Mortgage Life Insurance
 
Cover Level (£)

Number of years
Do you want:  
Critical illness cover
Family income benefit
 

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How much will the premium be?
Your premium reflects the level of cover you want and how long you want to be insured for. It also reflects the risk to the Insurance Company that you may make a claim. This risk is conditioned by your age, sex, occupation, health record and life style etc.
Is the price you’re quoted, the price you pay?
Not always. It depends upon the details you disclose in your full Application form.
If you’re asked to supply more information or go for a medical, will the premium increase?
No, not necessarily. If you’re asked for more information or to have a medical it does not automatically follow that your premium will increase. To put this in context, in our experience 88% of people who apply for life insurance qualify for the price first quoted.
Does your age affect your premium?
Yes, your age is one of the most important aspects that determines your premium. (Other important aspects include the level of cover you want, whether you are male or female, whether you are a smoker, your occupation and health record.)
Can life insurance be arranged quickly?
The short answer is that the speed depends upon your personal details.
With a repayment mortgage, the capital owed to the mortgage provider decreases each month as part of the monthly repayment steadily pays off the sum that was initially borrowed.

The purpose of your Mortgage Life Insurance is to repay the capital you owe if you died. Therefore, the amount of insurance cover you need, decreases as the years go by in line with your outstanding capital. This means that the insurer can afford to charge less in comparison with a policy where the sum insured remains fixed - as is the case with normal life insurance.

Frequently Asked Questions related to the above topic.
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