Mortgage Life Insurance
Mortgage life insurance is also called Decreasing Term Assurance and is designed to pay off your Repayment Mortgage if you die. Don't confuse it with Mortgage Payment Protection Insurance which pays you a monthly income if you are unable to work because of accident, sickness or unemployment.
Life Insurance is available for both repayment and interest only mortgages. The life insurance policy is usually set up so that it runs for the duration of the mortgage.
Interest only mortgages should have a level term assurance policy where the sum assured remains the same for the term of the policy.
A repayment mortgage needs a decreasing term assurance policy where the sum assured decreases in line with the reducing sum of your outstanding mortgage.
Both types of policy are available as a single or a joint policy and with or without critical illness insurance.
Your home may be repossessed if you do not keep up repayments on your mortgage.