Find the answers to some of the most frequently asked questions about life insurance protection.
Do I need life insurance if I have a mortgage?
We would certainly advise those with a mortgage to take out life insurance. If you pass away before your mortgage is paid off, life insurance can help ensure your loved ones aren’t left with the debt or forced to sell the property.
Life insurance provides peace of mind for your loved ones, providing relief of financial burdens in their time of grief. It’s especially important if you have dependents or a joint mortgage. Your partner may struggle to make mortgage payments on their own if the mortgage was offered based on joint income.
What type of life insurance is best for mortgage protection?
Decreasing term life insurance is often recommended for repayment mortgages. The pay-out reduces in line with your mortgage balance, usually making it a more cost-effective option. Our team will meet with you and discuss your needs, before identifying the best life insurance option for you.
Is life insurance compulsory when getting a mortgage?
No, it’s not legally required. However, many lenders strongly recommend it — particularly if others rely on your income. Some may insist on it as a condition for granting the loan.
How much cover do I need?
Ideally, your cover should match the value of your mortgage and any additional financial responsibilities, such as childcare or bills. The Bell Mortgage Solutions team will help you calculate the right level based on your personal situation.
You may have employer-provided life cover (known as death-in-service benefit). This is a great bonus but may not be enough to fully cover your mortgage or family’s needs. Employer-provided life insurance usually ends if you leave your job, so having a separate additional policy ensures continuous cover.
What’s the difference between level term and decreasing term insurance?
With level term life insurance, the pay-out you receive, and the money you pay monthly will stay the same throughout the policy term. Decreasing term life insurance has a pay-out that reduces over the policy term. This typically happens in line with your repayment mortgage balance.
Which is the right option for you will depend on your mortgage type and whether additional cover is required. Our team will help you determine the right choice for you, on a case-by-case basis.
Can I get joint life insurance with my partner?
Yes. A joint life insurance policy covers two people under a single policy. It will pay-out when one or both policyholders passes away. This may be more affordable than two single policies. However once the policy has paid out, it ends. This means that the surviving policyholder will be left without protection unless alternative arrangements are made.
Separate policies may be preferred, for more flexibility and overall cover. Contact our team to discuss the best option for your needs.
What happens if I remortgage or move house?
If your mortgage amount or term changes, it’s important to review your life insurance. You must make sure your policy still provides adequate cover. If necessary, you might need to adjust your policy or take out a new one. The Bell Mortgage Solutions team can help you with this.
Can life insurance cover more than just my mortgage?
Yes. You can include extra cover for family living costs or other debts. Additional protection like critical illness cover or income protection can also be added.
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