Mortgage Life Insurance

dgtech

Hi, I was wondering if you can keep a mortgage life insurance policy if you paid off a mortgage. Its a very good policy and not available any more.

phormium

Depends, if it was a standalone policy taken out and just assigned to the bank then yes no reason why you can't keep it. If it is some sort of block policy issued by a bank through it's own insurance company or a tied agent then probably ceases when mortgage is paid off, don't think there is too many of those around these days but older ones might be of that type.

Also if it's a decreasing mortgage policy then obviously the amount that would be paid out in a claim will continue to decrease over the years to roughly match what would have been owing on the mortgage so as you get to the end years you will still be paying the same monthly payment for a reduced cover.

If it's a level term policy then the amount of cover will remain constant throughout the term.

So in essence it all depends on what type you have. I have two level term policies that I took out as mortgage protection still running even though mortgage is gone, there is another 6 yrs of so left in them, they are cheap so I may as well keep them.

Trish56

Yes you can. I had a mortgage protection policy and even though I paid off the mortgage I held onto the policy to expiry date as it was good value.

dgtech

OK that's good to know.

Henry Ford III

Decreasing term becomes inceasing poorer value as time passes as the sum assured reduces but the premium doesn't.