What is mortgage protection insurance?
Mortgage protection insurance is a type of life insurance. If you become ill or die during the policy term, it pays off the rest of your loan. This means your family would be able keep their home and have one less thing to worry about.
Mortgage protection is also called decreasing term life insurance and decreasing life cover. It’s the same product.
Do I need mortgage protection?
- Your family and what would happen to your home if something bad happened to you. With insurance, they could pay off the rest of the mortgage and keep the house
- Some mortgage providers will recommend you take out mortgage protection insurance
- Should you become ill and not be able to work, would you struggle to pay off your mortgage repayments?
How does mortgage life insurance work?
- You’ll pay fixed premiums for a fixed period
- As you pay off your mortgage, the amount of insurance cover you have decreases
- If you become terminally ill or die during the policy term, the rest of your mortgage gets paid off.
Why choose mortgage protection with Vitality?
✓ 5-star Defaqto rated cover
✓ Temporary cover before your mortgage starts - To help protect you between when you legally commit to buying a house and when your mortgage premiums begin
✓ Affordable cover - Get up to 30% off your first year’s premiums with Optimiser. You’ll have the ability to maintain this discount when you make healthy lifestyle choices
✓ Guaranteed Insurability Options - You have the ability to increase or extend your cover on up to three occasions – an extra helping hand if you need to apply for a new or increased mortgage
✓ Comprehensive cover in a matter of minutes - Our intelligent underwriting drastically reduces the time it takes for you to get protected, so you could be covered in a matter of minutes
✓ Tailored protection to suit you - Our aim is to provide protection that suits you and your family’s needs. Enhance your plan further with tailored options including Optional Serious Illness Cover for Children and Waiver on Incapacity.
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Relevant guides and articles
Mortgage protection insurance
Mortgage protection is a type of life insurance designed to pay off your mortgage.
Term life insurance
Term life insurance gives you cover for a specific amount of time. You choose the term, and if you pass away or become ill during that term, your family receive a lump sum.
Life insurance for first time home owners
If you've just bought your first property, life insurance could help keep your loved ones protected. Find out how life insurance works for first-time buyers, here.
Mortgage protection insurance FAQs
Is mortgage protection the same as life insurance?
The key difference between the two comes down to the reasons you are taking out the cover.
For example, some may want to protect their family's finances if they die, and that's their priority. Others may want to make sure their family can keep their home if something bad were to happen.
If you need advice on what type of cover you need, call us on 0161 974 2517 to speak to one of our financial advisers.
What happens to my mortgage if I die?
If you have insurance, this will pay out and pay off the outstanding amount.
If you have whole of life insurance or term life insurance, your family will receive a tax-free lump sum. They can then use this money to pay off your mortgage should they want to keep the house.
Who is responsible for mortgage payments after death?
The executor of the estate usually pays this. Any savings are then passed on to the family or other named beneficiaries named in the will.
Do you have to have life insurance with a mortgage?
1Claims and benefits report June 2020.