Cover for the people who depend on you
A lump sum or an income for your family if you die during the term. The simplest cover to understand, and still worth arranging properly.
Life insurance answers one question: if you were not here, could the people you live with keep the house? A policy pays a lump sum or a regular income to the people you choose, so the mortgage is dealt with at the worst possible time to be dealing with anything.
Most people arrange it alongside the mortgage itself, because that is when the size of the debt and the people relying on it are clearest. The cover is shaped around your mortgage, your family and your budget, not sold off the shelf.
The one decision that shapes the policy
Decreasing term
The payout falls over time, roughly in step with a repayment mortgage balance, which is why it is usually the cheapest way to make sure the house is paid off. It protects the debt rather than a lifestyle: once the mortgage would have been cleared, there is nothing left over.
Usually right when the question is simply whether the mortgage dies with you.
Level term
The payout stays the same for the whole term, so your family receives a known amount whatever the mortgage balance happens to be. It costs more than decreasing cover for the same starting figure, and it leaves something beyond the debt.
Usually right when people rely on your income for more than the mortgage payment.
The questions people bring to this one
I already have death in service through work.
A genuine benefit and a poor foundation. It is rarely matched to your mortgage, it is usually a multiple of salary decided by your employer, and it ends the day you leave the job. Cover you arrange yourself is yours, and it moves with you between employers.
Should we get one joint policy or two single ones?
A joint policy pays out once, usually on the first death, and then it is finished. Two single policies cover each of you in your own right and often cost only a little more. Which is right depends on who depends on whom, which is a conversation rather than a rule.
I smoke, or I have a health condition.
That usually changes the price, not the answer. Insurers read the same medical history very differently, and placing your application with the one that reads it most sympathetically is the same job we do with lenders all day.
Who actually receives the money?
Worth deciding at the outset rather than leaving to paperwork later. A policy can be set up so the payout goes directly and quickly to the people it is meant for, and we raise that as standard when we arrange cover.
Do I have to have it to get the mortgage?
No. Buildings insurance is a condition of the mortgage; life cover is entirely your choice. We recommend it where it is genuinely needed, and if you live alone with no one relying on your income, we may well tell you it is not.
Let's find out where you stand.
One conversation, no cost, and no obligation to go any further. We will tell you honestly what is possible before you commit to anything.