| Buying a family home is a time when many | | | | more expensive than the decreasing term variety. |
| people begin thinking about taking out a life | | | | This is because with decreasing term insurance, |
| insurance policy to go along with it. A mortgage is | | | | the size of the pay-out decreases over time, so |
| very often the most significant financial decision | | | | the overall cost of premiums is reduced to reflect |
| that any individual makes, and it is always prudent | | | | that. Because all other aspects of these two |
| to find a way of protecting your mortgage, to | | | | types of policies are more or less equal-in both |
| ensure that your loved ones will not suffer | | | | cases, the mortgage is fully paid in the event of a |
| financially from the loss of your income if you | | | | claim being made-the type of insurance you get |
| should die. A carefully-chosen life insurance policy | | | | will typically depend on how much you can afford. |
| is an ideal method of achieving this protection. | | | | Level term cover does offer one advantage that |
| Level Term and Decreasing Term Life Cover | | | | decreasing term insurance does not. Because the |
| The most common way of protecting your | | | | size of the pay-out is constant over the life of |
| mortgage is to purchase term life assurance. | | | | the policy, your dependents will benefit from |
| Selecting life cover for mortgage protection | | | | increased financial security if there is money left |
| requires making a choice between two different | | | | over after the mortgage has been paid. For this |
| types of insurance-level term and decreasing | | | | reason, level term insurance should be your goal if |
| term insurance. | | | | it's affordable. This type of insurance provides |
| If you purchase level term life cover, the amount | | | | another advantage if you have an interest-only |
| you are insured for remains constant over the life | | | | mortgage, as your repayments increase over |
| of the policy. With a decreasing term policy, on | | | | time, and equity is slow to build-a level term |
| the other hand, the size of the potential pay-out | | | | mortgage can provide increased financial security |
| decreases as the mortgage is paid off. Regardless | | | | in this case. |
| of which type you choose, the policy ends | | | | Other Considerations |
| automatically if a claim is made, or when the | | | | Two other important decisions to make are |
| mortgage is paid in full. | | | | whether to choose joint insurance or two |
| The Cost of Mortgage Life Insurance | | | | separate policies for you and your partner, and |
| The cost of mortgage life cover depends on | | | | whether or not to purchase additional critical or |
| several factors. The most important determinant | | | | terminal illness cover. Some policies may include |
| of the cost of the policy is the terms and | | | | this coverage automatically, and some don't, so |
| conditions of your mortgage-the amount you | | | | it's always important to read the fine print and |
| borrow, and the amount of time you'll require to | | | | make sure you understand what you're covered |
| pay the mortgage in full. As will all types of life | | | | for. By the same token, a joint policy isn't always |
| cover, the cost also depends on your lifestyle, | | | | the best solution, even for a married couple, so |
| age, and physical health. Lastly, the type of policy | | | | it's equally important to check investigate all your |
| you choose-level term or decreasing term | | | | available options thoroughly before deciding |
| insurance-also affects the cost. | | | | between joint and separate policies. |
| In most cases, level term mortgage cover is | | | | |