Also known as term assurance, term insurance is the most common and often least expensive form of mortgage protection or life insurance cover. The insurer will pay out a lump sum, or pay off the remaining mortgage should the policy holder die. The two main forms of term insurance are level term insurance and decreasing term life insurance. Having this type of life insurance guarantees your beneficiaries have some form of financial stability, either by not having the burden of mortgage repayments or a lump sum, which can be used to pay off the remaining mortgage.

See also: Mortgage Glossary

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