If I Have A Mortgage?


Managing Your Mortgage

If you have a mortgage, this is probably both your largest monthly expense and your largest capital liability. But how would you protect the mortgage payments or the capital liability if you are unable to work due to accident, are diagnosed with a critical illness or die?

The most common type of insurance suitable for covering the capital liability of a mortgage is a decreasing term insurance policy, also known as mortgage insurance.

Mortgage insurance is used to cover the outstanding balance of a repayment mortgage. As your debt decreases with each repayment, the capital sum of the mortgage insurance will also decrease. Alternatively, if your mortgage is interest-only, a level term insurance policy will provide a capital sum that will not reduce during the term of the policy.

Mortgage insurance can be taken out on a life cover only basis to pay out a lump sum if you die during the policy term. Alternatively, mortgage insurance can be arranged on a life cover and critical illness cover basis to pay out a lump sum if you die or are diagnosed with a critical illness during the policy term.

In addition or in place of covering the capital liability, you may also require income protection cover to meet a portion of or all of the monthly mortgage payments until the end of the term of the mortgage.

Please get in touch if you would like to speak to us about arranging an insurance policy to protect you and your family by emailing contactus@jlib.co.uk or calling 020 7633 2222.


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