When you compare mortgage life insurance quotes, start with a question about the people who would be left paying the bills. If you died, would someone need enough money to clear the whole mortgage, keep up the monthly payments or cover other costs as well? Your answer helps determine whose life to insure, how much cover to consider and how long it should last.
One joint policy or two single policies?
With a typical joint first-death policy, two people are insured and there is one payout on the first eligible death during the term. The policy then ends. With two single policies, each person has their own cover. After an eligible claim on one policy, the other person can keep their policy in place, subject to its terms and continued premiums.
Imagine Sam and Alex have a £240,000 repayment mortgage and a young child. Their first priority is for either parent to be able to stay in the house. They could ask for a joint quote for £240,000 and compare it with the total cost of two individual policies. One question changes the comparison: once the mortgage has been repaid, would their child still need financial support if the surviving parent later died? They might also want different amounts of cover if one parent earns more or provides most of the childcare. Our family protection guide looks at those household costs.
Should the amount of cover decrease or stay level?
Decreasing term insurance reduces the amount insured over time. It can suit a repayment mortgage because the debt is also expected to fall. Ask to see how the insured amount reduces and compare it with your expected mortgage balance. If you borrow more, extend the mortgage or switch repayment type, it is worth checking the figures again.
Level term insurance keeps the insured amount the same throughout the term. Someone with an interest-only mortgage, for example, may still owe the original capital at the end. A household might also want a fixed sum to help with costs beyond the mortgage. MoneyHelper explains the different types of life insurance.
What if I have a mortgage on my own?
Think about who would need to stay in the property or take responsibility for the debt. A parent buying alone might want a child to be able to remain at home with a guardian. Someone with no dependants may have different priorities. If your main worry is paying the mortgage while you are alive but unable to work, our income protection guide explains that separate risk.
What do I need for mortgage life insurance quotes?
Bring your latest mortgage statement, the remaining term and details of any personal or workplace cover. For a couple, ask to see joint and individual quotes using the same cover amount and term. Compare the total premium, when each policy would pay, and what cover would remain after a claim. If you already have a policy, bring its schedule so the adviser can compare the terms with you.
Greenacre’s advisers in Sunninghill, Ascot, can talk through your mortgage protection options. Ask Greenacre for a life insurance quote and tell us who you want the cover to support.