Mortgage Protection

"...Mortgage protection is the term applied to life insurance/life assurance designed to cover a capital & interest (repayment) mortgage."

  

Mortgage protection is the term applied to life insurance/life assurance designed to cover a capital & interest (repayment) mortgage. The lump sum payable in the event of your premature death during the mortgage term decreases in line with your reducing mortgage debt.

If you are looking to put in place life cover for an interest only mortgage a level term assurance would be more appropriate.  

Mortgage protection is available on a single life or joint life basis. The policy has a fixed term and will pay out the sum assured (cover) should you die at any point during the term. The policy only has a value on death during the specified term. Cover will cease at the end of the specified term or if you stop paying the premiums.

Mortgage protection is available on a life cover only basis although it is standard for clients to take the policy as a combined life and critical illness plan. Additional benefits you can add to your policy include full income protection or the lesser accident, sickness and unemployment cover. 

Mortgage Protection is not compulsory. The only thing that most lenders will insist on is buildings insurance. If it's not compulsory and you feel healthy, why bother? Well none of us plan to have our houses burn down, but most of us agree a smoke alarm is a good idea. 

  

"...The simple fact is you should always cover property and debts you cannot afford to replace or repay from your regular income or current savings."

The simple fact is you should always cover property and debts you cannot afford to replace or repay from your regular income or current savings.

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Mortgage protection premiums quoted by providers are based on your age, sex, smoker status and the assumption you are in average health for your age.

You will often hear the term "underwriting" when arranging mortgage protection. Underwriting refers to the checks the mortgage protection provider does to ensure that you are in average health for your age. In the case where a medical condition requires further investigation, the mortgage protection provider will write out to your GP and in some cases may ask you to attend a medical. This medical is at the provider's expense.

If the mortgage protection provider feels your current health represents a higher than average risk, they can still provide cover. They will may ask for an additional premium to cover the increased risk. Only in extreme cases will they decline to cover you.

The majority of clients are accepted by life assurance providers on the standard premiums they have quoted as average health is a pretty broad brush.

From our experience the three main causes of clients not being accepted on standard premiums are:

  • a family history of serious illness (cancer, heart disease),
  • their having high blood pressure
  • obesity

If you are considering Mortgage Protection, please feel free to contact us for Independent Mortgage Protection Advice. We are able to provide home appointments across the whole of West Sussex - Brighton, Hove, Haywards Heath & Crawley, East Sussex, Surrey - Croydon Sutton, Reigate, Redhill,  South London - Wimbledon, Fulham, Chelsea and Hammersmith and Central London.

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