Mortgage life insurance

No, these are different policies. Mortgage life insurance gives a lump sum to pay off your mortgage in full if you die.

Mortgage protection insurance covers your mortgage repayments for a short time if you’re too ill to work or you lose your job. Most policies pay out for a maximum of a year.

Joint life insurance policies cover 2 people at once, so if either of you die, your beneficiaries get a payout. After that, your policy ends.

This could be useful if you've got a mortgage together, as it lets your family pay off the debt if one of you dies.

But joint policies only pay out once. If you both die at the same time, your beneficiaries only get a single payout. This might be enough to cover the mortgage, but it might not be enough to cover:

• Other debts such as credit cards, personal loans or car finance agreements
• Funeral costs
• Financial support for your children and loved ones after you’re gone

You could avoid this by taking out 2 policies - a joint mortgage life insurance policy, and a second joint life insurance policy. That way your payouts cover both your mortgage and the outgoings your family would need to keep living comfortably.

If you’re just looking to make sure your mortgage is covered, though, then a joint mortgage life insurance policy could be worth considering.

Just be aware that if you separate from your partner and decide to end your policy, you don’t get back what you’ve paid.

Anyone over 18 can be part of a joint life insurance policy. They don’t need to be a spouse or relative, but you do need to share the same address.

Joint mortgage life cover is usually more expensive than single life insurance policies as you’re covering 2 lives at once. But it’s usually cheaper than taking out separate policies for each person.

Yes, you can. If you’re the only policyholder and your marriage ends you can keep paying for your policy to stay covered.

If you have a joint policy, you should be able to remove the second policyholder and continue with a single-person policy. Your monthly payments are likely to change, so get in touch with your insurer to see what they can offer you.

The same is true if you move home. You should be able to keep your existing policy but alter it to better suit your new situation. Calling your insurer is the easiest way to see what your options are. Or try our guide on how to change your life insurance policy for tips on what to look out for.

Most policies cover you if you die due to illness or an accident. But there are a few situations where your mortgage life cover might not pay out.

These can include death as result of:

• Drug or alcohol abuse
• A reckless act
• Suicide

Failing to pay your insurance costs could also deprive you of a payout. Miss too many, and your policy could be terminated. You then lose everything you’d paid so far and are unlikely to get a payout if you died.

Most policies have a grace period though, so if you do miss a payment, you might be able to make up that balance and keep your cover. If you’re struggling to meet your monthly payments, it’s best to get in touch with your life insurance provider before things get that far.

Many life insurance policies pay out if you’re diagnosed with a terminal condition. If the condition is included in your policy details, you could claim the full amount while you’re still alive. You can then use it to pay off your mortgage before you die, making your remaining time a little easier for you and your family.

Generally, an illness is terminal when it can’t be cured and it limits your life expectancy to 12 months or less. Some insurers might have a different definition of what a terminal illness is, so it’s worth checking with them before you take out a policy.

Terminal illness cover is free of charge. This is different to critical illness cover, which is an add-on to your life insurance policy that comes at an extra cost.

Some insurers might ask you to have a medical examination before they offer you cover. This depends on your:

• Age
• Health
• Lifestyle habits
• Family medical history

If you’re a fit, non-smoking 30-year-old with no pre-existing medical conditions. You’re less likely to be asked to have a medical than someone older with a more complicated medical history, or who’s smoked their whole adult life.

The point of a medical is to assess your general state of health. This helps insurers determine your risk of dying during the term of your policy. This risk impacts your monthly payments. If you’re not in good health, your policy might be more expensive than someone who’s healthier.

If you’re older and are concerned about being asked to have a medical, or if you have a pre-existing condition, consider over-50s life insurance. You should be able to find cover without disclosing anything about your state of health. The only drawback is that the payout you get might be lower. Before you sign up, make sure it’s enough to cover your mortgage.

If your beneficiaries make a successful claim after you die, the payout goes directly to them. It’s up to them how the money is used. They could use it to pay towards funeral costs, or cover other debts.

But most people use the payout to cover the costs of the mortgage. As this is usually the biggest outstanding debt, paying it off takes a lot of the financial strain off losing a partner, or parent. It also means they’re able to keep their home, rather than having to sell it to cover these debts.