Do you need life insurance to get a mortgage?
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The short answer is no, you are not legally obliged to have life insurance. However, if you have dependants, that you will behind, then it may be worth considering purchasing
Buying a home can be one of the most thrilling but also daunting times. There will be so much paperwork to sign, chasing for updates on exchanging dates, browsing for furniture and items to make your new place feel like a home to you, and finally getting the
What happens to a mortgage without insurance?
If you have a next of kin who will inherit the property, they will have to pay your monthly payments. If they cannot pay, the lender could insist that your possessions are sold to clear the debt or even the property itself.
Some mortgage lenders can insist you have life insurance in place, or they won’t lend to you, so always check with who you are looking to get an Agreement In Principle from any bank. They will likely try to market to you their own life insurance but remember it is always best to shop around, you do not have to legally take the lender's life insurance policy.
What types of life insurances are there?
Now with Term life insurance, there are two different types which I’ve helpfully clarified below for you:
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What happens to life insurance when the mortgage is paid?
At the end of the agreed policy period, your cover ends and the pay-out it offered is no longer available and your life insurance cover will end.
If you are one of the lucky ones to reach this amazing goal then hat’s off to you, but for peace of mind and because when we live in a time when everyone is counting the pennies, having a life insurance policy in place can help take one less stress off your mind. Should a critical illness, terminal illness or even death stop you in your path, you can be confident knowing you picked the best policy for you and your family to help ease any further financial worries in your absence.