Do I need life insurance with a mortgage?

When you’re looking for a new home you may wonder if you really need life insurance with a mortgage.

It’s not a legal necessity to take out life insurance but it’s certainly wise to do so. According to recent research, more than £400 billion of mortgages are not covered by life insurance.

The figures show North East mortgage customers were the most likely to have life insurance. In London, almost £87 billion worth of mortgages are not covered!

So why do you need life insurance with a mortgage?

Why do I need life insurance?

One of the financial responsibilities of homeownership is to protect yourself and your family. Life insurance and your mortgage are inseparable companions.

• Life insurance provides a safety net. A payout can pay off the remaining mortgage balance, ensuring that your loved ones can stay in their home without the burden of mortgage payments
• Knowing that your family will have a roof over their heads brings invaluable peace of mind, ensuring that your home remains a place of security and comfort
• Premiums can be surprisingly affordable, especially when you’re younger and healthier. Securing a policy early on means you can get a lower rate and possibly make cost savings over the life of your loan
• Many lenders require borrowers to have life insurance as part of the mortgage agreement to ensure their investment is protected
• There is a choice of options, term; whole life; and critical illness cover. Tailoring your policy to your specific needs and budget is a smart financial move.

How much does it cost?

As with any insurance, the cost will depend on individual factors. Just like car insurance, it all depends on factors such as your job or age. These include:

• Age: As you get older there is more risk of illness, so the price will be higher. It’s better to take out your policy when you are younger.
• Health: Once you have health problems, it can be more difficult to get a policy. In the more acute cases, those with ongoing health conditions may not be able to secure life insurance.
• Lifestyle: If you smoke or drink excessively, the cost of life insurance will increase. This is because you are at a higher risk of becoming ill.
• Job: Your job also affects the insurance premium. If you work with dangerous chemicals or heavy machinery, you’re at more risk, so insurance costs are higher.

What should I do?

Our advice is to take out life cover with your mortgage. It will provide peace of mind as well as the necessary payments should the worst happen. Taking out life cover is an investment in your family’s security and a responsible financial decision that every homeowner should consider. So, talk to us today.

As with all insurance policies, conditions and exclusions will apply
Your home may be repossessed if you do not keep up repayments on your mortgage