Life is full of surprises. Being open to unexpected turns in the road is important. Mortgage protection is generally the lowest cost security in financial planning.
Be prepared for anything by expecting the unexpected
In most cases, mortgage protection is a legal requirement. Even if there are exceptions to this legal requirement, the lender will typically insist on the cover. Your Financial Broker can get you the best quality cover at the most competitive cost.
Remember, you are not obliged to deal with the bank who gives you the loan. In fact it is illegal for a bank to offer you a mortgage on condition you complete insurance with them.
At its most basic, mortgage protection is life insurance that parallels the outstanding mortgage. The cover diminishes alongside the loan (taking assumptions about maximum interest rates on the mortgage over the term).
You can get covers with options to increase the term and life insurance should you move home. This is useful in the case of your health going against you as you may be unable to trade up without the cover. Ask your Financial Broker to look at the cost of adding serious illness cover to the mortgage protection.
Applying for cover starts with completion of a medical proposal form. The life insurance company may write to your GP for a report, and in some cases a medical examination is required. Once you are accepted by the life company, cover is permanent for the term of the policy regardless of what happens to your health. Your Financial Broker will assist you with the form filling and will ensure the policy is set up correctly.
If you or your spouse die, the loan is cleared. If you are young, you should consider convertible term; this cover stays the same over the mortgage term and you can extend the cover at the end without health evidence.