Mortgage Matters Direct > Insurance > Life Insurance

What is Life Insurance?

Life Insurance pays out an agreed sum of money if you die before the end of the policy agreement.

Mortgage providers prefer you to have Life Insurance in place so that your next-of-kin are not left behind with a large commitment that they are unable to pay if the worst was to happen (you should speak to an adviser to discuss).

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There are two main types of policy you can opt for:


● Level Term pays a fixed sum that’s agreed with your insurance provider.
● Decreasing Term pays out an amount that depreciates until your policy ends. This is commonly used to cover your repayment mortgage balance which will, of course, decrease as the years go by. This type of policy is considerably cheaper than the Level Term since the pay-out figure is steadily going down.

What does Life Insurance include?

● Sudden death by natural causes.
● Murder.
● Manslaughter or accident.
● Suicide – with some policies.

Speak to an advisor

Common Life Insurance exclusions:

Insurers are unlikely to pay out if the policy holder’s death is determined to be a result of putting themselves at obvious risk. However, higher-quality products may also cover suicide after 12 months of premiums being paid.

Should I take out Life Insurance?

It’s not nice thinking about what will happen after we die, but it’s important to be practical – especially if dependents share your home. A Life Insurance policy will ensure that your mortgage will be paid if the worst should happen.

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