Insurance

Life cover

This makes sure that your dependants have the money to repay the full loan if you were to die. There are two main types of life cover:

Level term assurance

You can use this cover to protect you, your family, your mortgage or a business, for a fixed monthly premium throughout the term you have chosen. The amount of life cover you have chosen will be paid out as a lump sum if you die within the term. This would typically be taken out alongside an interest only mortgage.

Decreasing term assurance (Mortgage Protection)

This cover is typically used to protect a repayment mortgage and is usually cheaper than Level Term Assurance. The plan provides a guaranteed sum of money if you die within the term. The amount decreases over the term of the policy roughly in line with your outstanding mortgage debt.

Term Assurance policies have no 'cash-in' value at the end of the term, or if you choose to cancel the policy early. This means that the cost of this type of cover is lower than whole-of-life policies given the amount of life cover provided.

Options typically available with level & decreasing term assurance

Waiver of Premiums

In the event of long term ill-heath, either through sickness or accident your premium payments will be paid by the insurer.

Terminal illness cover

If you are diagnosed with a terminal illness and are eligible to claim during the plan, and are given less than 12 months to live, your policy will pay out a lump sum to help you to sort out your finances. This cover does not normally apply during the last 18 months of the term.