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If you’re like most homeowners your mortgage payment will be the biggest thing you have to pay for every month. Making your repayment may be easy if all goes well but it may get a great deal more difficult if you, or the main income earner in your home, were to die. If the main salary is lost you may wish to give some thought as to how your family might be able to maintain the mortgage repayments. For this reason, a lot of UK homeowners use decreasing mortgage life insurance cover to give them protection and security for their family

Decreasing term mortgage life insurance is taken out over a certain period. Often, if used for mortgage protection, a policy might, for example, have the same term of time as your loan. You have life cover during this time. But, unlike other products, this kind of policy may work out to be cheaper in many cases. This is typically due to the fact that as you pay off your mortgage while alive the amount left owning decreases and the benefit on the policy is in line with this.

This kind of insurance for life often proves popular as it mimics what happens with a regular repayment mortgage. When taking on this form of insurance you are typically give:

• life insurance protection for the term of the policy;
• protection for your loved ones to ensure the mortgage repayments are paid off in the event of your death.

One of the biggest benefits that may come with decreasing mortgage life insurance cover may be its comparatively affordable cost. This form of insurance usually comes with lower monthly premiums when compared to other forms of insurance. To an insurance company this kind of life insurance represents a low chance of them having to pay out on a claim. You may, for example:

• not die whilst you have your policy at all (so the provider may never have to make a claim payment);
• might pass away after paying premiums for many years which means you reduce the amount left on the policy for the provider to pay out.

This doesn’t, however, mean that your family has to lose out. This kind of insurance is often set up to specifically work with your mortgage. Generally, any payment that may be made because of a claim is aimed at paying your mortgage off in full in the event of your death. The point to remember is that full payment for a repayment mortgage also goes down in value over the years.

Decreasing mortgage life insurance cover may not suit every individual but, as it may be among the lowest of cost options, it may be worth considering. If, for example, you find that all your family really needs if you die is enough cash to repay your mortgage, then this may be a solution worth serious consideration.

This may not give them a lump sum that they use to repay your mortgage with some left over for living expenses and to use as an income. But, if they don’t need this extra cash in any case then you might choose not to pay to get the additional cover. Decreasing mortgage life insurance cover may well be a cheaper and simpler option that gives you the protection they need if they ever needed to claim on your life insurance.

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