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Life is Expensive, but you still need to be Protected
When you take out a mortgage it is possible the largest financial commitment that many of us will make. Home buyers are recommended to take life insurance when they take out a mortgage. But do you really need to have it take it out? It can sometimes be very confusing with you feeling pressurized into purchasing and ultimately ending up with insurance they don't want.
What is a Fully Protected Mortgage?
To be fully protected, lenders and brokers often recommended a variety of policies alongside the mortgage, from basic life insurance to plans including mortgage payment protection insurance (MPPI), critical illness and income protection. You could argue that buyers need all of these types of cover but it depends on affordability, most people have to priorities.
Is Mortgage Life Insurance Compulsory?
Life cover is probably the top priority if you are buying a property with a mortgage but it is not compulsory. If purchasing alone, you might not take life cover as if you die the mortgage can be paid off when the house is sold. Instead you could look at other mortgage protection options.
Buying with a a partner or have children though is different. Can you afford not to cover the mortgage if either of you die, what would happen if you didn't have cover? Do you want the surviving partner to have to continue the mortgage payments or have to refinance the loan?
How Much does Mortgage Life Insurance Cost?
The Good news is that decreasing mortgage life insurance does not need to be expensive.
| Age | Our Premium |
|---|---|
| Joint 30 years old | £5.06 |
| Joint 35 years old | £7.40 |
| Joint 40 years old | £8.86 |
| Joint 45 years old | £17.71 |
| Joint 50 years old | £18.86 |
Cheapest premiums non smokers male AND female as of the 26/05/2024.
As you can see for a young person, life cover is relatively cheap and affordable. Even for level cover premiums can start at just £4.04 a month for a non-smoking aged 30 looking to cover a 100,000 pounds interest-only mortgage over a 25 year period. (source Webline 20/06/2024) At you can see above it does get more expensive as you get older. If you do not buy until you have Dependants your premiums will likely be more, and if you become seriously ill in the meantime, you may find you are refused insurance.
What About Critical Illness Cover?
Critical illness' cover is another product often recommended with mortgage life insurance. It also offers a mortgage life insurance and also pays out if you suffer one of a number of serious illnesses (like cancer, heart attack and stroke) during the term of the policy. Since the odds on this are higher than you dying, it is more expensive. For a 30-year-old woman, a decreasing life and critical illness policy for a mortgage of 100,000 pounds costs about £15.14 per month (source Webline 20/06/2024).
Do you want Advice on Life Insurance?
Go Direct can help you find the right mortgage protection all with our discount online premiums. if you would like life Insurance advice, please complete our life insurance enquiry form and we will contact you to discuses your insurance needs.