Level Term Mortgage Life Insurance pays out a cash lump sum to pay off your mortgage should you pass away.
The amount insured remains fixed – or ‘level’ – over time. This means it’s particularly suited to protecting an interest-only mortgage, where the outstanding capital balance doesn’t fall over time.
Another use may be for family protection, as the sum assured doesn’t diminish with time, providing your loved ones with a consistent amount of cover over the life of the policy.
- Mortgage Life Insurance provides you with peace of mind knowing your loved ones and home will both be financially secure should the worst happen.
- Opt to include Critical Illness Cover to protect yourself against serious illnesses as well, such as cancer, heart attacks and strokes.
How Does Level Mortgage Life Insurance Work?
Level Life Insurance offers a fixed term policy that will guarantee a set lump sum that pays out if you die during that term.
For example, if you had a mortgage that lasted for 25 years, you’d take out a 25 year Mortgage Life Insurance policy to cover the mortgage balance – say £250,000 – over those 25 years.
If you died during that term, you’d receive £250,000 regardless of how many years into the policy you passed away.
Level Life Insurance will pay out on the death of the insured individual.
Most policies now include Terminal Illness Cover, which allows the benefit to be paid out early if you’re diagnosed with fewer than 12 months to live.
Critical Illness Insurance is an optional add-on to the policy for an additional premium. It extends the scope of the cover to include a payout for serious illnesses also – the most common claims are for:
- Heart Attacks
Where the quality of Critical Illness Cover can vary considerably from one insurer to the next it is important check the small print.