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

You need normal, level cover, Life Insurance.

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
 

Hot Topics

How Much Will It Cost?
You can have Mortgage Payment Protection Insurance for either unemployment alone, sickness and accident, or all three. The costs of the policies we sell are as follows: -
Are There Any Situations That Would Result In My Claim Being Refused?
Yes there are the usual exclusions. These are summarised below but you should carefully read the paperwork that comes with your insurance documents.
You have an Interest Only Mortgage. What sort of Life Insurance do you need?
You need normal, level cover, Life Insurance.
When would normal Life Insurance be used in connection with a mortgage?
Term Insurance is another name for Life Insurance. Normal Life Insurance is used if you have an interest only mortgage.
Will your mortgage lender accept a Life Insurance policy bought online?
All your mortgage lender will want is evidence that your life is insured for the correct sum and term. A copy of your Acceptance letter will normally suffice but some lenders may want to see a copy of your policy.
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: -