My partner and I have a joint mortgage together and I am currently looking into Mortgage Insurance. Do we need Joint Life Insurance that covers us in case of the death of one partner?
- Tom Conner
Firstly, it is not usually compulsory to take out Life Insurance to protect a mortgage but in many cases it is wise to consider this type of cover in any case, especially for joint mortgages or if you have a family to protect.
What is Joint Life Insurance?
Joint Mortgage Life Insurance is a type of Life Assurance designed specifically to repay a mortgage loan should one partner pass away. The policy would pay out once upon the death of the first partner and then terminate.
Taking out this type of plan means that if either partner were to die the mortgage loan could be repaid and the remaining partner (and family) would therefore not be left with the potential problem of having to meet unmanageable loan repayments on their own.
Do Both Individuals on the Mortgage Need to Have Life Insurance?
A common question is whether both partners need to have life cover for a joint mortgage, and the answer is no.
In some cases it might make more sense only to take out Life Assurance for one partner rather than a joint plan. One example of this might be if only one partner works and pays the loan.
It is also worth noting that the additional monthly premium for taking out two separate plans, one for each partner rather than a Joint Term Life Insurance often only costs around 10-15% more and you end up with twice as much cover.
For more information please read this guide: Does joint mortgage life insurance make sense?
Should I Include Critical Illness Cover?
Finally, you may also like to consider adding Critical Illness Cover to your joint life assurance plan so the policy could also pay out if either partner were to suffer a serious illness or injury such as cancer, heart attack or stroke.
Plans usually cover around 40 medical conditions although there are policies which cover fewer than five illnesses and those which cover in excess of 100, so it pays to read policy terms and conditions carefully.
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