You have an Interest Only Mortgage. What sort of Life Insurance do you need?

You need normal, level cover, Life Insurance.

Level cover Life Insurance makes sure that the capital you borrowed on your interest only mortgage would be repaid in full if you died.

The Life policies we offer also include Terminal Illness cover free of charge. Terminal Illness cover ensures that your policy will also pay out if you become terminally ill and were not expected to survive more than 12 months.

With an interest only mortgage, the amount of cover you need remains constant as you do not repay any of the capital borrowed until the end of your mortgage. Therefore, your insurance policy needs to provide you with a fixed and constant sum insured. This is exactly what level cover Life Insurance does.

If your mortgage is held in joint names your cheapest option is to have a Joint policy (almost all mortgage providers will insist on both mortgage holders being insured).

For mortgage purposes, Joint policies are written in what is called first life. This means that the policy will pay out if either of you were to become terminally ill or die or during the policy’s term. It is important to note that once a Joint policy has paid out on a first death or terminal illness, the policy is finished – it will not pay out again if the second person were to die.

All proceeds from insurance policies are paid to you tax-free.

Please note:
If you want insurance that would pay your monthly mortgage payments if you were off work through sickness, accident or unemployment, then you should have Mortgage Payment Protection Insurance.

If you want insurance that repays your outstanding mortgage capital if you became critically ill, you need Critical Illness Insurance.

Frequently Asked Questions related to the above topic.
Click below if you wish to read them: -

• How much should you insure for?
• How long should you insure for?
• What happens if you need cover quickly in order to complete a house purchase?
• What is the difference between Critical Illness Insurance and Terminal Illness Insurance?
• Should you have a “Guaranteed” or a “Reviewable” policy?
• Should you include Critical Illness Insurance on your policy?
• 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?
• If your insurer asks for a higher premium because you are Rated, is it worth applying to another insurance company?
• Will your mortgage lender accept a Life Insurance policy bought online?
• Do I need mortgage payment protection insurance ?
• Go to menu of Frequently asked Questions about Mortgage Life Insurance
• Go to menu of Frequently asked Questions about Critical Illness Insurance

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This web site is owned by Andromeda Webs Ltd. Andromeda Webs Ltd, is an Appointed Representative of Web Publishing House Ltd. Web Publishing House Ltd is authorised and regulated by the Financial Services Authority for insurance mediation.