Life insurance against a mortgage

gazza87a

Has anyone used life insurance to put against a mortgage. I am currently about draw down a mortgage and the bank said that it would be better to just put mortgage protection against the mortgage, and get separate life cover if i wish, as if you put the life cover against the mortgage you need to go trough the bank to get any balance.. and would delay etc. So just wondering what peoples thoughts are. 

Obviously i think the bank are just looking after themselves and insuring that the mortgage will be paid but just wondering in terms of best value for money what do people think is best.

Henry Ford III

2 thoughts:

1/. The lenders interest will be covered wholly by a simple mppa policy. Anything over and above that isn't necessary.

2/. Mppa is cheap, but isn't the best value.

Four Phucs Ache

You are free to get life cover with whoever you want if you want it.

The simple mortgage cover is required again you are free to go wherever you want.The bank is legally required to ensure you have mortgage cover.You don't have to take the policy they offer.

They cannot refuse the mortgage if you don't take their policy.

gazza87a

Four Phucs Ache wrote: »

You are free to get life cover with whoever you want if you want it.

The simple mortgage cover is required again you are free to go wherever you want.The bank is legally required to ensure you have mortgage cover.You don't have to take the policy they offer.

They cannot refuse the mortgage if you don't take their policy.

Yeah it wasn't really a question on who I should go with. I know I can choose any provider.

It's more a question on should I take out mortgage insurance and just use that against the mortgage, while taking out separate life insurance. In order to give myself or wife a lump sum.should either of us die...
Or taking out just life insurance and putting that against the mortgage. Does putting life insurance against a mortgage complicate matters when claiming should either myself or my wife die.

Mooooo

I took out a lifepolicy of the amount owed but the policy won't drop with the repayments it will stay the same so if I was gone tomorrow debt would be cleared but in 20 years time .majority will go to whoever I choose . Wasn't with the bank

Trish56

You have a few options : Take out a mortgage protection policy for the amount and term of the mortgage - should either one of you die the balance on the mortgage is paid off.

Take out a dual level term policy for either the amount of the mortgage or a higher amount. You will have to assign this policy to the lender and should one of you die, the lender will be paid what is owed on the mortgage and the balance will go into your estate and cover will continue at a reduced premium on the survivor.

gazza87a

Trish56 wrote: »

, the lender will be paid what is owed on the mortgage and the balance will go into your estate and cover will continue at a reduced premium on the survivor.

What is meant by cover will continue at reduced premium for survivor.