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

Mortgage life insurance vs. private mortgage insurance

Private mortgage insurance... Mortgage life insurance... Don’t these two sound the same? There may be confusion as to these insurance products, which actually are two distinct products.

Private Mortgage Insurance

PMI is a product that aims to protect the mortgage company. In the event that you are unable to pay your mortgage, the PMI will kick in to pay what is still owed the mortgage company. This means that if you die, are disabled or become unemployed and default on your monthly mortgage payments, the insurance will cover for it.

However, this does not mean that you are the borrower can get away scot-free. The insurance company will in turn recover what they have paid to the mortgage company by way of a recovery judgment. That means that PMI is not an assurance that you get to keep your house.

The PMI is non-transferrable and will terminate when you refinance the mortgage or change your mortgage lender.

Why do you need PMI? PMI is usually required for repayment mortgages where the down payment is less than 20% (or 15% in some cases). The lender will want to ensure that the mortgage has a lower risk of default payments and the higher the down payment, the lower the risk. The government has stepped up to help home buyers secure their mortgage and prevent foreclosure. Learn more about the mortgage protection programs of the UK government.

Once you are able to earn enough equity (based on the mortgage payments you have made and the increase in value of the property), you can request to cancel the PMI cover.

Where can you get PMI? Most mortgage lenders offer PMI with their mortgage package. However, these may be more expensive as opposed to shopping around with another provider. You have the freedom to source your PMI cover from outside providers.

Mortgage Life Insurance

This product is aimed towards the protection of your investment in your home. This insurance provides another level of protection so that in the event that you, as the borrower, pass away, your spouse and children don’t have to worry about paying the mortgage or face the foreclosure of your home. In essence, this insurance protects your interests, rather than the bank’s.

Why do you need mortgage life insurance? This is an optional product that we highly recommend that you buy to lessen the risk of foreclosure in the event of your untimely death.

This product can apply for both repayment mortgages and interest-only mortgages. For repayment mortgages, you can get decreasing term life cover while for interest-only mortgages, you can get level term life cover for the mortgage loan.

Where can you get mortgage life insurance? You can life insurance quotes for mortgages directly from your lender or from this website. Simply fill up the form on the right to get the quote for your unique needs.

Latest update: 16.06.2013

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

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