When you take out a Decreasing Term Mortgage Life Insurance policy it will pay out a lump sum to cover the remainder of a mortgage on the death of the insured person to a named beneficiary or beneficiaries. With a mortgage such as a Capital Repayment Mortgage, your balance owing reduces during the term so the lump sum you would receive from a protection policy would also reduce alongside it.

If you have an interest-only mortgage as then you may want to consider Level Term Mortgage Protection Insurance

If you would rather have a monthly income paid to your beneficiaries rather than a lump sum then Family Life Insurance may be preferable for you.

What do I consider when taking a Mortgage Protection Policy?

What kind of mortgage do you have? If you are unsure whether a Decreasing Term Mortgage Protection policy is the right way to go for you then our expert life insurance partners can help.

You need to be sure that any payment that you would receive from a policy would cover the mortgage balance you have left at the time of your death. You should also make sure the policy runs for the same period your mortgage does. If you think that you may want to extend the mortgage it is possible to set the policy up for a longer period at the start, as the cost of life insurance is a lot less when you are young and you can normally cancel a policy at any point free of penalties.

With Mortgage Protection cover in place, if you should die during the term, your beneficiaries (which is normally your family) would be able to repay the mortgage debt and continue to live in the home. Without a mortgage to pay this can significantly reduce their outgoings at a time when they most need it.

Can I take out a Joint Reducing Term Insurance Policy?

You certainly can! Joint Life Insurance policies can be taken - which will repay the mortgage on the death of the first of the insured. These usually works out cheaper than taking out two separate single life policies.

What are the advantages of taking a Reducing Term Protection Policy?

• They are often cheaper than taking out a level term policy

• There will be no change to your premiums during the term of your policy

• You can feel comfortable in the knowledge that, should you die, your loved ones can stay in their home

How easy is it to arrange Reducing Term Mortgage Protection Insurance?

Your policy can be sorted in a matter of hours if your situation is uncomplicated - however, if you do have to go through medical screening, this can delay the process by up to three months (depending on the availability of the medical screening team). We would suggest discussing your requirements with one of the advisors a few months before the date you think you need to put your Reducing Term Mortgage Protection Insurance in place if you can.

How can I get advice on whether Decreasing Term Mortgage Protection is right for me?

We would be delighted to arrange a call back from a friendly mortgage protection specialist. Their advice is given fee-free and on a no obligation basis, and they are happy to share their wealth of knowledge and experience on the different ways families can make certain they are protected. They can also arrange policies from most large insurers in the UK.

They will look at what your needs from insurance are and what makes your requirements unique such as health concerns, extended family or longer term plans then suggest a range of options that will cover your needs best within a budget that works for you.

Many people need to change their mortgage deals and that is the right time to also reconsider their mortgage protection policy. Our partners can help here too.

We can get an expert advisor in touch with you - click the green button above or use the link below - provide your contact details and requirements and our team will be in touch very soon.

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LifeSearch. our expert partner, are one of the UK's largest life assurance brokers. They can provide cover from a wide range of companies including AIG, Aviva, British Friendly, Legal & General, LV=, Royal London, The Exeter, Vitality, Scottish Widows, National Friendly, Shepherds Friendly, Cirencester, Holloway, Guardian and Zurich. Like MoneyMaxim, they are regulated and authorised by the FCA, and offer a guarantee to give you the right cover at the most competitive premium available all fee free and with no obligation to purchase.

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This content was last reviewed on 21/06/2023