The cost of mortgage life insurance

How much does mortgage life insurance cost? Please take note that although this is an optional coverage, it is something worth looking into (and buying!). And you need to carefully take this into account, budget-wise. Can you pay over and above your monthly mortgage payments?

You may be tempted to forego the coverage because of the cost. However, if you die, you need to make sure that your family is able to keep up with the payments. Otherwise, they may just lose the house, for which you have already sunk in a considerable investment!

Some factors that affect the cost of insurance include:

• Your age
• Your health condition and medical history
• Your occupation and pastimes
• The amount of your mortgage
• The length of your mortgage
• Answers to health questions (i.e. How long one has been smoking or has stopped smoking)
• Type of cover (Read more about getting Level term vs. decreasing term cover)
• Additional options or riders. You can opt for a no-frills, bare-minimum policy or include riders to strengthen the cover and include other eventualities such as disability, illness or injuries due to accident.
• Number of people cover. You can choose to cover just yourself or get a joint life cover to include your spouse in the cover.

The lower the risk of dying you present, the better your chances of getting good rates. So, compared to a slightly overweight smoker, a healthy individual who loves to go to the gym may be charged with lower premiums.

Smoking will raise the cost of mortgage life insurance

As with other kinds of life insurance policies, your health habits will have an impact on your premiums. If you are a smoker, expect to pay higher premiums. This is because smoking carries a strong health risk. If the insurance company considers you a high risk, they will also charge higher premiums for that.

If you have been smoking but have kicked the habit for at least a year, you can be counted as a non-smoker. If you are already rated as a smoker in the policy, if and when you decide to stop smoking, you can apply for a review to lower your premiums – after a year that you have been smoke-free.

Shop around

Of course, premiums will vary depending on the insurance company, as well as the range of benefits and riders you add to the basic policy. The best thing to do is to shop around to get the best price. You don’t even have to get out of your house – let your fingers do the searching! You can use the Internet to ask for quotes from different sources.

The cost of mortgage life insurance vs. the benefits

Is this cost worth it? Well, if you live alone and don’t have any dependents, getting to keep the house after you have gone may not be an important issue for you. After all, who will you leave the house to?

However, if you have dependents who may be hard-put to continue with the mortgage payments, the policy can protect them by paying off the mortgage so that your family won’t need to worry about this.

Latest update: 16.06.2013

Get your mortgage life insurance quote now, fill our form on the right.

Other sites: critical illness cover, lifeassurance.org.