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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Will your premiums increase?
It depends upon whether you have a “Reviewable” or “Guaranteed” policy.
Could you end up paying more for insurance than someone else the same age?
Yes you might, because your age is only one of many aspects the insurance company takes into account when determining your premium.
Once you've got your quote, what's the next step?
If you decide to go ahead you’ll need to fill in an Application form.
How do you go about making a claim under your policy?
Claims are made directly to the Insurance Company who issued your policy. Details of how to claim will be found within the booklet they provide with your Application form and policy.
Information about The Financial Services Authority
Who is the Financial Services Authority? (FSA)
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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