What Type of Life Insurance Do I Need for a Repayment Mortgage?

There are two main forms of mortgage life insurance:

What is Decreasing Life Insurance?

Decreasing Term Life Insurance has an amount of cover which declines over time. This is often taken out to protect a repayment mortgage as the level of cover declines as does the amount outstanding on your mortgage.

What is Level Life Insurance?

The alternative is Level Term Mortgage Life Insurance, where the level of cover you choose at the start of the plan is fixed for the whole term of the policy. Given the level of cover does not change this type of plan is often used for an interest-only mortgage.

With an interest-only mortgage your monthly payments are only covering the interest and thus your outstanding loan will remain the same, hence the need for a fixed amount of life cover.