Mortgage Protection is life assurance at its most basic. The amount of cover you need and the length of time you should be protected for will depend on the amount and term of your mortgage. As you pay off your mortgage your cover will reduce to reflect the reducing amount you owe on your mortgage. No payment is made if you survive to the end of the policy.
The cost of the cover will stay the same throughout the term of your policy, therefore, you will always know how much you are paying.
There are three options for Mortgage Cover:
Single Cover: Protects yourself, which means the insurance company will make the payment if you die during the term of the plan; OR
Joint Cover: Protects yourself and your partner, which means that the insurance company will make the payment if you or your partner die during the term of the plan. Under this option, they will only pay once; OR
Dual Cover: Protects yourself and your partner, which provides cover for two people and continues after the first person dies. Where your life cover is arranged on a Dual Life basis, cover is provided separately for the two lives. As the two lives are covered independently, a claim for one of the lives has no impact on the levels of cover relating to the other life. Dual Life Cover is available for Life Cover and Specified Illness
Zurich Life, Aviva Life and Royal London are the providers who offer dual life cover on Mortgage Protection.
You can include the following Benefits:
A. LIFE COVER: Pays out a lump sum if you die or
B. Life and ACCELERATED SPECIFIED ILLNESS COVER: Pays out a lump sum if you pass away or are diagnosed with one of the specific conditions covered according to each plan.
The most important points about Mortgage Cover
You must be aged 18 to start this cover
The maximum term for life cover is 50 years or up to age 89
The life cover can only be paid out if you die or are diagnosed with a specified illness during the term of the plan
The amount you pay is guaranteed to stay the same for the whole of the period you are insured for.
You cannot cash in your plan as there is no value on this policy.