Life insurance is a vague term as there are numerous different types of life insurance. We put together this mortgage protection guide to explain what it is and why we always recommend any homeowner to take out life insurance.
If you’re in the market and looking to take out life insurance, it’s worth speaking with a mortgage & protection specialist in York. We offer life insurance Advice in York, and we would urge that you take up our offer on a free insurance consultation that we provide to new/existing customers.
That said, if you are confused about the differences between the many various types of life insurance, you need to learn the most suitable policy that covers you best and how long it lasts before making any radical decisions, as not all policies will match your circumstances.
Life insurance pays out a lump sum of money to the deceased loved one/ friend in the event of their passing. With regards to your mortgage, you can choose how the payout gets distributed. Also, the person who took out the cover can decide to either payout through regular payments or a whole sum. Life insurance helps provide:
As stated, there are various types of life insurance policies to choose from, and affordability will always play a large part in our lives. Whilst it would be wonderful to cover yourself for every potential opportunity, that’s not always possible.
Here we have listed the different types of life insurance available. If you want to find out more, speak with one of our protection specialists in York today.
With level term life insurance, you will only get covered for a fixed term as the payout is only valid within the time frame stated inside the policy.
People usually take out this policy that’s in line with their mortgage term. So a level term typically runs between 5-25 year terms in 5-year increments.
Why would you want to take out a policy that decreases in value? Well, this policy targets homeowners with repayment mortgages. Homeowners choose to take out this policy to pay off the outstanding mortgage balance should they die.
The policy’s value mirrors the outstanding balance remaining on your mortgage. As the amount owed on your mortgage decreases, so does the sum insured.
This type of life insurance works in the opposite way to decreasing term life policy. The difference with Increasing the life insurance is that you are covered for increases as your term goes on. It will increase by a fixed amount until your policy term ends.
Increasing term life insurance can help protect the policy’s total value against inflation and is usually in line with the retail price index.
The whole of Life policy helps cover you throughout your entire life. The costs of Whole of life insurance will be costly. However, if you keep up-to-date with your payments, you will be covered for your whole life.
This type of insurance is usually used for family protection and is part of inheritance tax planning.
If you are in a relationship/married, you could consider taking out a Joint life insurance policy that will pay out if one of you dies. You could still have two separate life insurance policies if you want to, but it is often cheaper than taking out two separate ones.
This type of life insurance cover may be offered to you by your place of employment. Your company is not obligated to provide Death in Service cover. However, some do as part of their employee benefits package.
Death in service is usually a lump sum of cash paid out to an employee’s family or a person of their choice if they die, and this sum can be up to 5 times their annual salary.
Just because you are a single homeowner doesn’t mean that you should disregard all life insurance options.
If you have settled into a new place and are currently living on your own without children or a partner, it’s not unusual for people to forget about life insurance. People also sometimes choose to ignore it, and this is because it doesn’t always apply to single homeowners.
This doesn’t mean you shouldn’t think about it though as your circumstances could change in the future, and if they do, then life insurance could become an essential thing to have.
We want to make sure that you have the right policies in place to allow you to leave your family in the best position possible if you die. Taking life insurance will give your family financial certainty and take a little stress off them in an already difficult time.
As a Mortgage Broker in York, we know that life insurance, no matter the type of cover, is highly beneficial and can put you at ease knowing that your family won’t have to pay for your debt payments.
If you want to learn more about life insurance, take up our free Insurance consultation in York. We will explain the policies available to you and why they could benefit your family’s personal and financial situation in the future.
But don’t just take our word for it. Why not check our reviews to see what our trusted customers say about Mizna, one of our mortgage protection and specialist
We always ask our customers to review us. We do this because our reviews reflect a complete picture of our service from start to finish and highlight how amazing our team is.
Some people didn’t know that life insurance can combine with other policies, depending on your situation. The other Insurance articles we cover include: