Frequently asked questions
What is Mortgage Protection Assurance?
Mortgage Protection Assurance is a Term Life Assurance Policy, taken out to provide protection and peace of mind for anyone who has a mortgage. The intention is to provide enough money to pay off the outstanding amount of the mortgage on the death of the person who has the mortgage, which enables their family to remain in the family home, without the worry of trying to keep up mortgage payments with the main breadwinner gone.
Why is it a Term Assurance Policy?
A Term Life Assurance Policy, usually just called Term Assurance, is a policy taken out for a specific term, or number, of years, so this type of insurance is chosen to provide cover for the number of years remaining until the mortgage is paid off.
How does a Mortgage Protection Policy differ from a normal Term Assurance policy?
A normal Term Assurance Policy, usually known as a Level Term Assurance Policy, provides the same amount of cover (level) for the length of the term of the policy. A Mortgage Protection Policy is intended to provide just enough cover to clear the remaining mortgage, this amount decreases over the lifetime of the mortgage, and policy, so it is cheaper to provide this limited amount of cover, while providing the full amount of required protection, which is the amount required to clear the mortgage at any given time.
What is the difference between a Mortgage Protection Policy, a Decreasing Term Assurance and a Reducing Term Assurance?
Nothing really, other than the name, they are all ways of describing what is basically the same thing.
Can I take out a Joint Mortgage Protection Policy?
Yes, of course, the fact that you and another person have a mortgage together is adequate proof of Insurable Interest
so you can have a policy which covers both you and your partner and pays out in the event of the death of either partner, allowing the surviving partner to remain in the home without the worry of trying to meet the mortgage payments, probably on a reduced income.
Can I take out a Level Term Assurance for Mortgage Protection?
Yes, a Level
Term Assurance will provide the same amount of Life Cover for the entire duration of the policy, so, if you have a Repayment (Capital and Interest) mortgage and you take out cover for the full amount of the mortgage at the start, there should always be some additional money available from the policy on death, after the amount of the mortgage has been cleared. There is no restriction on what you can use this money for. You should be aware that doing it this way will mean higher premiums. For mortgage on an Interest Only, Endowment, or ISA basis, the amount outstanding remains the same for the mortgage term, to Level Term Assurance is required for this type of mortgage in any event.
I have read about miss-selling of mortgage related cover, what is that all about?
The cases of miss-selling widely reported recently have not been for life cover. The problems related to Mortgage Payment Protection Insurance (MPPI), which in some cases had been sold to people who would be unable to claim on their policies because of the terms and conditions restricting their cover.
How quickly can I cancel my present policy?
It is wise to keep on any existing cover until you have received confirmation of acceptance of your new policy, particularly where you have pre-existing medical conditions which could be relevant to underwriting.
Will your quote be cheaper than the policy arranged by my mortgage provider?
Banks and Building Societies are usually restricted in their choice of Life Assurance Company they are authorised to place life assurance business with, often with just one company, in some cases even one owned by themselves. Comparing the wider market can often result in considerably lower premiums.
Will my Bank or Building Society be upset if I cancel the life cover they have arranged?
Quite possibly, but they will get over it! You are free to arrange cover with anyone you like and you have every justification in doing so if you can save money by getting replacement cover at a cheaper premium.
What do I need to do to get a quote for Mortgage Term Assurance?
That's an easy one! Just use our Quote Request Form and we will do the rest.