What is it?
Mortgage Protection insurance is designed to pay off your mortgage in full if you die before the mortgage has been fully paid. The amount of benefit insured is the same amount as your mortgage. It reduces in line with your mortgage as your mortgage decreases over the term.
Please note that “Mortgage Protection” is not the same as “Mortgage Payment Protection.” Mortgage Payment Protection is designed to cover your repayments for a period in certain circumstances such as being unable to work due to redundancy or ill health.
Why you may need it?
When you get a mortgage to buy your home, you will generally be required to take out mortgage protection insurance. This is a particular type of life assurance taken out for the term of the mortgage and designed to pay it off on the death of the borrower or joint borrower.
In most cases, the lender is legally required under Section 126 of the Consumer Credit Act 1995 to make sure that you have mortgage protection insurance before giving you a mortgage, with some exceptions (see Exceptions below).
However, if the lender offers you a particular policy, you are not required to buy it. You can shop around for a mortgage protection policy that suits your needs. Your lender cannot refuse you a mortgage because you don’t buy the policy it offers.
Mortgage protection should be payable on a joint life, first death basis. This means that the mortgage is repaid on the death of the first borrower if a couple is involved.
You do not have to take out mortgage protection insurance if:
- You are aged over 50 or
- The mortgage is not on your principal private residence (your home) or
- You cannot get the insurance, or can only get it at a much higher premium than normal
- You already have enough life insurance to pay off the home loan if you die
- However, some lenders may insist that you take out mortgage protection insurance as a condition of giving you a mortgage, even if there is no legal requirement in your case.
How can Rockcourt help?
As an insurance intermediary we have an agency with all the insurance companies (below). We can provide a fair analysis of the market on your behalf enabling us to find you the greatest level of benefit for the lowest cost. Our quotes are the same, and sometimes better, than going direct. Several insurance companies will have various deals and promotions at different times; we can always price match the cheapest quote on the market to attain these deals at the lowest price.