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

Group credit life insurance to protect your mortgage

Foreclosures also cost lenders!

Foreclosures costs lenders around £40,000. When a mortgage holder cannot pay the monthly amortizations anymore for an extended period of time, the lender will foreclose on the property.

However, the lender loses money due to the following costs:

  • Lost payments
  • Legal fees
  • Administrative fees for taking possession of the policy
  • Loan mitigation
  • Losses related to selling the property at a lower price

Group credit life insurance is one way that banks and mortgage lenders protect your mortgage in the event of your death. The policy is taken out by the bank to insure that the debt given to the borrower will be paid even in the event of his death.

The group policy is usually for private mortgage insurance, but can also be issued for mortgage life insurance. (Not sure you know the difference between the two? Read Mortgage life insurance vs. PMI)

Don’t forget to read the fine print!

Life Insurance issued on a group basis makes it easier for you to get the cover you need, even if you are not in the best of health.

However, underwriting for such policies come during claims time. When a mortgage holder has died and it is time to make a claim, the insurance company may look more deeply into the medical records of the Person Insured. There may be cause to deny the claim. It’s important to answer the medical questions in the application form completely and honestly to avoid this from happening.

With a group life insurance policy, there is a main or “mother” policy where people are enrolled and added to the list as they come.

Here are some of the qualities of a credit group life insurance:

The master contract will stay in force for as long as the lender continues paying for the premiums. Once the premiums are not paid or the lender is unable to list a certain number of debtors under the policy, the contract may be terminated.

When the master contract is terminated, all the individual debtor’s insurance coverages will also be terminated. As for cover for each individual under the group policy, this will cease when the debt is fully paid.

If you are concerned about getting a more “permanent” cover, then you should consider getting individual term life cover. Learn more about choosing mortgage vs. term life insurance.

Latest update: 17.06.2013

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

Also feel free to visit our sister critical illness cover website.