Protecting Your Mortgage with Life Insurance and Critical Illness Insurance

When you take out a mortgage, your lender will require you to secure your loan.

First, they will ask you to take out a mortgage life insurance. This life insurance coverage will protect the lender in the event that you, the lender, will pass away. Now, you can also place additional levels of protection by adding a critical illness insurance cover with your mortgage life insurance policy.

The mortgage life insurance policy will provide the payment in the event of your death. This is designed to decrease at the same rate as your total mortgage debt. As you pay for your mortgage, the level of your life insurance coverage will also decrease.

But what about if you are diagnosed with a critical illness and are not unable to work? The danger is that you may face foreclosure and wreck your credit rating because you cannot pay for the monthly mortgage. If you are the main breadwinner (or even just supplement the family’s total income), it is crucial that you protect your family from financial crises such as foreclosure.

When you are looking towards getting critical illness insurance (with the view of protecting your mortgage, as well as other financial needs), these are the things you should carefully consider to help you get the right kind of cover that you need:

Your level of debt. This is not just with regards to your mortgage debt, but with other debts and obligations as well. When you are considering how much cover to get, the rule of thumb will be roughly 75% of your total debt for the next five years.
The kind of mortgage you have.
Other related expenses. This includes your daily needs, as well as your medical needs. You need to study these expenses vis a vis your current savings. To what extent will your savings last?
How long your family will be dependent on you for financial support and income. This includes how much you need to save up for your children’s education.

Cover Details
Type of Insurance
Type of cover
Over what period?
Amount of cover
Type of premium
Personal Details
Title
First Name
Last Name
Date of birth
Do you smoke?	No Yes
Email address
Home phone
Work phone
Mobile Phone
Is this a joint application?	No Yes
App. 2: Title
App. 2: First Name
App. 2: Last Name
App. 2: Date of birth
App. 2: Do you smoke?	No Yes
House Number
House/Flat name
Street
Area
Town
County
Postcode