There are broadly speaking two types of life insurance or life assurance as it is often known, policies that pay out in the event of death, and mortgage protection policies that deal with other scenarios such as unemployment and illness.
This is the main area of mortgage protection and sometimes called life assurance, whereby an insurer pledges to pay out a sum of money to your beneficiaries when you die.
Life insurance products on offer include:
- Level term life insurance which runs for the length of your mortgage term and pays out if you die.
- Decreasing term life insurance which decreases as your mortgage debt falls and is popular among those with repayment mortgages.
- Increasing term life insurance which increases each year and is for those concerned about the effects of inflation.
- Whole of life insurance policy which pays out following a death and runs beyond the length of a mortgage term.
The insurance industry now offers a raft of products for every eventuality, whether it be unemployment or injury. These can either guarantee the remaining mortgage is paid off or that you and your family receive a regular income.
Mortgage protection products on offer include:
- Mortgage payment protection which guarantees mortgage payments are met.
- Income protection which guarantees a household income, which can be the mortgage repayments or more.
- Critical illness cover whereby an insurer will pay out a lump sum if a disease or illness from a set list is contracted.
See also: Life Assurance & Mortgage Protection
To start your search for a Life Insurance policy please see our Life Insurance Directory