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Frequently Asked Questions about Mortgage Life Insurance
General Questions
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What is Mortgage Life Insurance?
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- Will the Mortgage Payment Protection Insurance pay your interest and capital?
- You decide how much you want the insurance to pay out each month if you’re off work. So make sure your cover is sufficient to meet your full monthly repayment to your mortgage provider.
- How much should you insure for?
- The rate you pay is charged per £100 of income you need. So, you should insure for the next £100 above the cost of your monthly mortgage repayment.
- For how long will the policy continue to pay your mortgage?
- The Mortgage Payment Protection Insurance will pay your mortgage for up to 12 months or up to when you return to work, whichever is the sooner.
- Will a claim under a Mortgage Payment Protection policy affect any State benefits to which you may be entitled?
- No. Whilst you are using Mortgage Payment Protection Insurance to replace your income and meet your monthly mortgage repayments, insurance payouts do not qualify as income in the eyes of the Benefits Agency or the Inland Revenue.
- You want to ensure that your mortgage is paid off if you were to die or become seriously ill and could not work again. What sort of life insurance do you need?
- You need either Life Insurance if you have an interest only mortgage, or Mortgage Life Insurance if you have a repayment mortgage. Then you need to add Critical Illness Insurance. You can do this all in one policy.
- What happens if you need cover quickly in order to complete a house purchase?
- Is there any investment value in your policy?
- Can you keep your Life policy on if you pay your mortgage off early?
- What is Mortgage Payment Protection Insurance?
Is it really Mortgage Life Insurance you need?
- You have a Repayment Mortgage. What sort of Life Insurance do you need?
- You have an Interest Only Mortgage. What sort of Life Insurance do you need?
- When would normal Life Insurance be used in connection with a mortgage?
- You want to ensure that your mortgage is paid off if you were to die or become very seriously ill and could not work again. What sort of life insurance do you need?
- You want to ensure that your monthly mortgage repayments are paid on your behalf if you were off work due to sickness, accident or unemployment. What sort of insurance do you need?
Aspect you have to make decisions about when buying Mortgage Life Insurance: -
- How much should you insure for?
- How long should you insure for?
- Should you have a “Guaranteed” or a “Reviewable” policy?
- Should you include Terminal Illness Insurance?
- Should you include Critical Illness Insurance on your policy?
- Which optional extras are important for Life Insurance?
Are there any problems if I buy Mortgage Life Insurance here online?
- Will your mortgage lender accept a Life Insurance policy bought online?
- Will you have to pay a fee to your mortgage lender if you don’t buy your Life Insurance through them?
- Do you have to buy your Life Insurance through your mortgage lender or mortgage broker?
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