Mortgage Life Insurance Cost Calculator

What Affects The Cost Of Mortgage Life Insurance?

When it comes to the cost of Mortgage Life Insurance, there are a number of factors that affect the price of your premiums. They fall into either personal factors (things you can’t change) or policy factors (tweaks you can make to change the price).

Personal Factors

The following aspects relate to your personal circumstances, and will have an impact on how much you pay for Mortgage Life Insurance.

If You’re Older, You’ll Pay More

The older you are the more your Mortgage Insurance premiums will be. This is because with age comes greater health risks and greater chance of passing away during the policy terms. With greater risk to the insurer comes greater premiums.

Health Issues Cause Higher Premiums

Whether it’s Critical Illness Cover or Private Medical Insurance, insurers will look at your medical history to work out your Mortgage Insurance cover. If you have a pre-existing health condition, insurers will tend to:

• Provide cover but with increased premiums
• Exclude the condition you suffer from, but offer discounted premiums
• Cover you without any exclusions for a higher cost.

If you have a pre-existing health condition, it’s crucial to get specialist advice before buying a Mortgage Insurance policy. We know the market inside out, so can find you the right policy for your needs at a competitive price.

Our advice is completely free, so give us a call on 02084327333 or email help@drewberry.co.uk to chat through your options.

Alex Weir
Independent Health & Protection Specialist

Smoking Significantly Increases The Cost

Due to the associated health risks with smoking, most insurers will charge you a heftier Mortgage Insurance premium compared to non-smokers. Even if you don’t smoke cigarettes you could still face higher premiums if you vape or use nicotine patches. This is because most insurers deem anyone who’s used nicotine in the last 12 months as a smoker.

High Risk Occupations = Higher Premiums

Your job can have a big impact on the amount you pay for protection. Some jobs are higher risk than others, i.e. those working in construction or at heights are more at risk of a claim than an office worker. Because of this, insurers tend to charge those in risker jobs more.

Jobs that are deemed high risk by insurers include:

• Offshore Workers
• Carpenters
• Builders
• Farmers
• Firefighters
• Scaffolders.

Hazardous Hobbies Hike Up Premiums

It’s not just high risk jobs that will increase your Mortgage Protection premiums. Extreme and hazardous hobbies will also put you in a higher risk category for most insurers, so if you’re a keen glider, a big wave surfer, or a free solo climber, your premiums are likely to be over 25% higher than those with less adventurous hobbies.

Activities that are deemed hazardous by insurers include:

• Big wave surfing
• Off-piste skiing
• BASE jumping
• Kiteboarding
• Free climbing
• Scuba diving
• Hang gliding.

Each insurer views occupations and hazardous sports differently, so it’s best to speak with a specialist before taking out a policy. By being upfront about your job and hobbies, you can continue doing the things you love with full peace of mind, knowing you’re fully protected.

Policy Factors

If you’re working with a tight budget, you can tweak the below factors to tailor the cost of your policy.

The Cost Will Increase The More Cover You Need

The more you want a policy to pay out, the higher your premiums will be. As Mortgage Life Insurance is designed to pay off your mortgage, the payout you choose (also referred to as the “benefit”) should align with the amount you have left on your mortgage.

The Longer You Need To Be Protected, The Higher Your Premiums

The longer you want a policy to be in place, the more you’ll pay for Mortgage Life Insurance. This is due to the fact that the risk of making a claim increases as we age. The length of your policy term should align with your mortgage end date.

Adding Critical Illness Cover Is Significantly More Expensive

One option you have when it comes to Mortgage Life Insurance is to add Critical Illness Cover to your policy. Many people choose this option so that they’re covered if they become unwell (i.e. cancer, heart attack or stroke), not just if they pass away.

While Critical Illness Insurance provides peace of mind, it also sharply increases the cost of your premiums.

Level Cover Is More Expensive Than Decreasing Cover

Depending on your mortgage type, you need either level cover or decreasing cover.

• Level cover
  Your payout is fixed for the life of your policy. Best suited for interest-only mortgages
• Decreasing cover
  Your payout will decrease over time. Best suited for repayment mortgages, ensuring you don’t pay only for the cover you need.

Joint Cover Naturally Costs More

If you have a joint mortgage and both want life cover, you may be tempted by a Joint Mortgage Life Insurance policy.

Covering two people on one policy increases the risk of a claim, and increases the cost of the monthly premiums.

Premium Type Affects The Cost

When choosing a Mortgage Life Insurance policy, you’ll have the option of opting for reviewable or guaranteed premiums. There’s a significant difference between the two and the cost of a policy will vary depending on which one you choose.

• Guaranteed
  Guaranteed premiums cannot change over time. Your premium is fixed from the outset of the policy. While they start out more expensive, they often work out cheaper during a long-term policy.
• Reviewable
  The insurer is able to “review” premiums as they see fit. For example, your premiums could go up if the insurer has received a high number of claims. Reviewable premiums are cheaper at the outset, but they can become a lot more expensive over time.

Compare Mortgage Life Insurance Quotes And Get Specialist Advice

When covering something as important as your mortgage, it’s essential to understand what you’re buying. Making a mistake could have expensive consequences.

We can help you find the most suitable Mortgage Life Insurance provider for your needs, breaking down any complex terminology to ensure you’re buying the right policy at the right price.

For fee-free advice, give us a call on 02084327333 or email help@drewberry.co.uk. Alternatively, use our online quote tool to get started.

Why Speak to Us?

When it comes to protecting yourself and your finances, you deserve first-class service. Here’s why you should talk to us:

• There’s no fee for our service
• We’re an award-winning independent insurance broker, working with the leading UK insurers
• You’ll speak to a dedicated specialist from start to finish
• 4083 and growing independent client reviews rating us at 4.92 / 5
• Claims support when you need it most
• We’re authorised and regulated by the Financial Conduct Authority. Find us on the financial services register.