Mortgage protection is a form of life assurance that must be put in place before you draw down your mortgage. It is a form of protection insurance that covers the life assured or policyholder during the term of the mortgage. In circumstances where a joint mortgage is required then both people would need to have mortgage protection insurance. This policy will run the term of your mortgage, So, if you take out a mortgage over 25 years, your mortgage protection must also be in place for this term.
Mortgage protection insurance is an insurance policy that pays off your mortgage if you or another policyholder dies during the term of the mortgage. If you have a joint mortgage, both people need mortgage protection insurance. It runs for the same length of time as your mortgage. So, if you take out a mortgage over 20 years, your mortgage protection insurance must also be in place for 20 years.
Mortgage protection insurance is cheaper than ordinary life assurance. Under a Mortgage protection policy, the pay-out decreases in line with your mortgage. This means that there is less life cover required each year so the premium will be cheaper compared to a level-term life assurance policy.
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