Mortgage Protection Insurance - What does it do?

Mortgage Protection insurance, also known as Mortgage Life Insurance, pays out a lump sum to repay your outstanding mortgage if you die or fall terminally ill. The premiums you pay decrease each year in line with the decreasing sum you owe your mortgage lender.

Mortgage Protection Insurance - we're here to Help

It’s essential that you get the right kind of cover for your needs – that’s why your details are taken by ClickLife a specialist mortgage protection insurance broker who will phone you and discuss your individual requirements. To submit your details and be contacted by ClickLife within 24 hours, Get a Quote !

Why do I need Mortgage Protection Insurance?

Repayment Mortgages UK

If you have a Repayment Mortgage - that’s where your monthly payments repay both the interest and capital you initially borrowed, then you will need Mortgage Protection Insurance to ensure that your family is not faced with repaying the mortgage if you were to die.

You will receive a quote for a special low cost life insurance policy where the sum insured decreases each year in line with the decreasing sum you owe your mortgage lender.

Interest Only Mortgages UK

If you have an Interest Only Mortgage - that’s where your monthly payments simply repay interest (you will be repaying all the initial capital you borrowed at the end of the mortgage period), then you need a regular Life Insurance policy. Please transfer to the main Life Insurance page.

Did you know?

• 1 in 3 people develop cancer at some point in their lifetime, 1 in 4 die from cancer
• 1 in 5 male deaths occur between the ages of 20 and 65
• There are an estimated 2.68 million people living with Coronary Heart Disease in the UK
• 75,000 people suffer a heart attack, stroke or cancer every year
• 33% of people have no insurance to pay off their mortgage if they die

Top tips for Mortgage Protection Insurance buyers

A Guaranteed Mortgage Protection Insurance policy will eventually work out cheaper than a Reviewable Policy - Reviewable Mortgage Protection Insurance policies have the lowest premiums on day one but Guaranteed policies wil work out much cheaper over the medium/long term. This is because as the years go by, Reviewable premiums increase whereas Guaranteed policies have their prices fixed and guaranteed forever (there’s more information about this on our FAQ Menu).

Now could be a good time to add low cost Critical Illness cover to your new low cost Mortgage Protection Insurance policy - more and more people take out a Critical Illness policy to pay off their mortgage if they fall critically ill. It certainly makes good sense as 1 in 4 men and 1 in 5 women will suffer a critical illness before they retire. There are two good reasons why you should consider buying it now:

• You can buy a policy that combines low cost Critical Illness cover with low cost Mortgage Protection Insurance cover. This policy ensures that, in addition to death or terminal illness, if you became critically ill, your repayment mortgage would be fully repaid. This clearly frees you from a major worry.
• You should be able to buy a combined Mortgage Protection and Critical Illness policy with a guaranteed fixed premium. This is a big advantage as many life insurance companies will not offer a guaranteed premium if you buy Critical Illness Insurance alone. (Read Tip 1 for more details).

Adding illness cover to your Mortgage Protection Insurance policy? - make sure you understand the difference between Terminal Illness and Critical Illness cover. People frequently confuse Terminal Illness cover with Critical Illness cover - but there’s a world of difference between the two. Make sure you appreciate the difference.

Terminal Illness is any illness from which you are expected to die within 12 months from diagnosis (as certified by a Doctor). You cannot buy a stand-alone Terminal Illness policy – terminal illness cover is always included free within most good Mortgage Protection policies.

Critical Illness. Compared with terminal illness cover, a critical illness policy pays out if you are diagnosed with a much wider range of qualifying chronic illness, illness from which you could survive for a very long time. For example: certain cancers, heart disease, multiple sclerosis, loss of speech/sight/hearing, onset of Parkinsons or Alzheimers disease before the age of 65, coma, various tumours, stroke, third degree burns etc. Conditions do vary between insurance companies. Critical Illness cover always costs you extra.

If you want your Critical Illness Insurance to more than simply pay off your repayment mortgage - You may decide that you want to use Critical Illness insurance to do more than simply pay off your repayment mortgage. Why? Because if you become critically ill, you may well be faced with medical bills and may need to spend money on your house to make it easier to live in (wider doors, ramps, downstairs toilet, stair lift etc). You might even want your insurance to provide an extra contingency sum to help out with these extra costs or to help offset your loss of income. And don’t forget, your payout from an insurance policy will not be subject to income tax.

If you have decide that you would like your Critical Illness cover to do more than pay-off your repayment mortgage, then discuss it with ClickLife. You will be able to get a quote on a special policy combining Mortgage Protection Insurance and Critical Illness policies – this is the cheapest way of getting this type of cover. You can also buy them separately if you prefer. ClickLife will give you specialist help and information over the phone.