mortgage repayments insurance faq

Mortgage Protection Insurance FAQ

Can I have a policy that covers both my partner and myself?

Policies that cover two people are known as 'Joint Life Policies'.

Yes, known as 'Joint Life Policies', there are two popular forms of this type of insurance. Firstly, there is a joint life first death policy, which will immediately pay out if either of you were to die whilst insured. Secondly, there is a joint life second death policy, which pays out only if both of you were to die during the period covered by the policy. Only the joint life policy is suitable for mortgage protection purposes.

How much cover will the bank require?

If you are taking out a new mortgage then the amount of cover must be at least the amount of the mortgage. Likewise the number of years covered must be at least the term of the at the cost of policies from different companies can be directly compared.

How is mortgage insurance calculated?

Insurance companies calculate premiums based on the age(s) of the applicant(s), the sex of the applicant(s), the amount of cover required, the term of the mortgage, whether the applicants smoke or not and the mortgage interest rate assumed in the calculation (see above). The premium is guaranteed not to increase over the term of the mortgage.