Life and Critical Illness cover is a good idea for anyone from the age of 18 upwards. You just have to see the statistics page to see why.
This is often known as repayment mortgage protection or Mortgage Life Insurance. A repayment mortgage debt decreases each time you make a payment. Most people take out a life assurance policy that pays the mortgage off in the event of them dying during the term of the mortgage. Critical Illness insurance cover can be built into the life assurance policy. This then covers you for death and Critical Illness cover should a diagnosis be made during the term of the mortgage. As the mortgage debt reduces with each payment, so too does the level of cover.
The policy is designed just to pay off the mortgage. To fully protect yourself and your home you should ensure that the
Critical Illness insurance policy ends at the same time as your repayment mortgage. The policy is portable and can be used
against any repayment mortgage you might have during the term of the policy. If the benefit is not sufficient to match
your mortgage, a top-up policy can be arranged. Many Critical Illness policies also have an option to increase the level of cover
without the need for further underwriting.
Life and Critical illness insurance can be built in to an interest only mortgage life assurance policy or it can be set up as a stand-alone policy.
As with repayment mortgage protection, if a Critical Illness is diagnosed within the term of the policy, a benefit is paid. The main
difference is that the benefit stays the same throughout the term of the mortgage. To fully protect yourself and your home you should
ensure that the Life Critical Illness insurance policy ends at the same time as your interest only mortgage. The policy is portable and once set up
can be used against any mortgage or property you might have during the term of the policy.