Life cover, life insurance or life assurance is a policy that is designed to pay out a cash lump sum if you were to die. This payment could be used to pay off some or all of the outstanding balance on your mortgage. Or help your family continue to pay the mortgage payments, household bills or childcare costs.
Why you should have it
Life cover is designed to give you and your dependents peace of mind. At what would be an extremely distressing time, a life insurance policy will ensure everyday money worries aren’t part of the problem.
This kind of protection is particularly popular with couples who have a joint mortgage. It prevents one partner from being left with a debt that they may not be able to continue paying. Especially if the partner that passes away is the main earner in the family or if the lender now deems the mortgage unaffordable to the surviving applicant.
For Buy to Let Landlords, if they pass away, their hard-earned investment doesn’t become an asset to their remaining family but sadly a debt. A life assurance policy covering the mortgage debt and placing it into a trust to avoid it going through the estate, means that the property can be left to them, potentially debt free.
Type of cover
Policies can vary in the level of cover they offer. You can choose the amount of cover you want, considering your share of the mortgage debt and any employer death-in-service benefits you may have. You can also choose to insure for a fixed amount or decreasing – to reduce as the mortgage balance decreases. As well as the term of the policy – generally this would be for the term of the mortgage, but you can choose for your entire life. In addition to covering the risk of death, you could also choose that an element of critical illness cover is in place. As well as when purchasing a property, it’s important to review your life cover when making changes to your existing mortgage amount or term, changes to the size of your family, or after a change in employer.
With so many insurers and with so many different policies it’s important to understand the cover you need. At 177 Protect our team of protection experts will ensure that they build a deep understanding of your personal, financial and employment circumstances. We will search the entire market to recommend the right level of life cover to meet your needs and budget.
Speak to our team about Life Cover today
To find out more speak to an adviser on 01249 474959 or fill out the form below and we will be in touch.