There are several different types of life policies. Mortgage protection is the most common as most people are required to have it if they have a mortgage on their home.
What is life insurance / life assurance / life cover? These are all terms referring to an insurance policy where a client pays a premium to a life company who will in return pay out a predetermined amount in the event of that person or persons dying during the period in which the policy is in effect.
The most common reason why you will need to take out a life policy is because it will be required by your mortgage lender in connection with a home loan.
This is a requirement set out in legislation under the Consumer Credit Act and is designed to afford the consumer, their estate and loved ones protection in the event of their untimely demise.
A mortgage protection policy will pay out a sum equal to the value of the outstanding mortgage in the event of the person or persons covered passing away. This will allow the property on which the mortgage is secured to pass unencumbered to the deceased estate with the lenders interest being cleared.
Income protection insurance provides cover if you are unable to work for a predetermined period of time (usually 26 weeks), and will continue to pay out until you are able to work again. The maximum you can cover is 75% of your income.
Getting a policy - Firstly a proposal needs to be completed and a level of personal information disclosed relating to the people to be covered. This information will contain information on the person’s personal information such as name, address and date of birth. You can also expect to be asked some more personal medical questions in relation to personal & family medical history.
To find out how to calculate how much life cover you need click here.
In certain circumstances it may be possible to waive the general requirement of having a life policy relating to a mortgage; however, it is prudent that every effort is made to put a policy in place.
If you have any queries please pick up the phone and one of our qualified staff will assist you.
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