Mortgage protection insurance is a type of life insurance that can help to protect your home if you die or become disabled. You pay an annual premium for this coverage, and when you die or are unable to work because of disability, it may cover the outstanding amount on your loan.
Mortgage protection insurance can also provide guaranteed income for your spouse and/or children should you pass away unexpectedly. This benefit can be used in addition to any other life insurance policies you may have in place (such as group term life). However, mortgage protection doesn't cover 100 percent of your mortgage balance—there's a cap on how much money it can pay out each year based off what percentage was left at the time of death (usually 60-75 percent), so if it wasn't nearly paid off at that point then down payments still need to be made via savings or other sources after death occurs."
What is Mortgage Protection Insurance?
Mortgage protection insurance is a type of life insurance, which protects your family's mortgage payments in the event of your death. Usually it's included as part of a mortgage, but can also be purchased separately.
In exchange for paying a monthly premium over a certain period of time (typically 5-10 years), you will receive regular income payments until the policy matures (the amount paid out increases each year). The money is paid out to whomever you nominate as beneficiary on the policy.
How Much Does Mortgage Protection Insurance Cost?
The cost of mortgage protection insurance depends on your age and the size of your mortgage. For example, if you're aged 25 with a £300,000 mortgage and want to get life cover that will pay out £200,000 when you die, the annual premium for this will be around £617.
However, this is generally cheaper than getting traditional life insurance as it's more straightforward (no medical exams or lifestyle questions).
Is Mortgage Protection Insurance Right for You?
Mortgage protection insurance is a type of life insurance that can be used to pay off your mortgage if you die.
The main difference between mortgage protection insurance and term life insurance is that with mortgage protection, the payment amount stays the same until maturity (usually 30 years), whereas with term life, it decreases over time to eventually reach zero at the end of your term.
Mortgage protection insurance can also be used as an income replacement plan in case you become disabled or lose your job. You would receive monthly payments from the insurer until such time as you find employment again and resume making regular payments on your home loan - or until expiry at which point any outstanding balance will be paid out by them instead (though this will obviously leave nothing left for any surviving family members).
Need to Know Basis
Mortgage protection insurance is a type of life insurance designed to pay off your mortgage or other debts if you die.
It can be taken out alongside a mortgage, but it's also available to those who don't have one. Here's what you need to know about this type of insurance:
Mortgage protection insurance can be an important part of your financial security. While it’s not for everyone, it may be right for you if you have a high-cost mortgage or want the extra peace of mind that comes with knowing that your family will be taken care of in case something happens to you.