the right policy at the right price
Why cover:
  • 6 of 10 UK mortgage holders have life cover
  • secure your loved ones’ well-being
  • price at all-time low, cover from £5 a month
Why us:
  • helping you find the right policy for you
  • critical illness cover; heart attack,cancer
  • the whole market compared, fast & free

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!

How much does mortgage life insurance cover cost?

Expect to pay an extra £8 to £10 a month. This price is for a 25 – 30 year-old who has a £100,000 mortgage loan.

This is for a decreasing term insurance policy for a mortgage that will last over 25 years.

Some factors that affect the cost of insurance include:

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

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