Do I need life insurance for a mortgage in the UK?

There is no legal obligation to have Life Insurance when applying for, or having a mortgage. However, some lenders will only consider your application if you do have it. It makes sense that the bank knows they can recoup the money for the mortgage if you were to pass away. The life insurance policy also ensures that you do not leave the mortgage debt to a loved one.

Buying a home with someone else

Making the jump to buying a house with someone is a big commitment, your finances will be tied with your partners for the lifetime of the mortgage. If the unthinkable was to happen and one of you was to pass away, then the remaining will be liable for the entire mortgage repayments. Now this may be unaffordable on a single wage, the sensible thing to do is to take out life insurance so that on the off chance that one of you were to pass then the mortgage would be paid off in full and the remaining partner would own the house outright.

Life Insurance as a Landlord

Whether you are a single property landlord or own a portfolio what happens to your properties when you die, if you have a mortgage against them, depends on the lender. Some will demand the settlement of the mortgage immediately, whilst others will just require continued repayments.

Either way, this will leave your loved ones with a huge debt to pay. It is therefore advisable to ensure that you are covered to the value of the amount you have outstanding in mortgages.

 Decreasing Term Life Insurance

The Life Insurance policy most often associated with mortgages is a decreasing term life insurance. This is the perfect product for mortgage cover as it decreases over the lifetime of the policy.

Our advisors can make sure that you are covered for the right amount, and for the right length of time ensuring that you do not pay more than you need to AND that you are covered adequately.

Related Articles

What is Decreasing Term Life Insurance?

Decreasing Term Life Insurance is an insurance product that is similar to Level Term Life Insurance except that is usually used to protect against a debt, think Mortgage. As the amount you owe on the mortgage decrease over…

Read More
Insurance for mortgage

Do I need life insurance for a mortgage in the UK?

There is no legal obligation to have Life Insurance when applying for, or having a mortgage. However, some lenders will only consider your application if you do have it. It makes sense that the bank knows they can…

Read More

Can I Get Life Insurance For A Pre-Existing Condition?

It is possible to get life insurance if you are having a pre-existing condition, but it does depend on the condition. If possible, it may cost more and take extra time for the acceptance of your application. What…

Read More