Life insurance is often used for mortgage protection, so that if you die during the term of your mortgage the outstanding sum is paid off from the benefits of the life insurance policy. Mortgage protection usually refers to a decreasing term life insurance policy, in which benefits decrease each year in line with the outstanding mortgage amount so is therefore only suitable for a repayment or capital and interest mortgage, if you wish to protect an interest only mortgage see Term Life Insurance .
Mortgage protection is often taken out on a joint life basis and will pay a benefit on first death only to ensure that the surviving partner has not got the worry and financial burden of having outstanding money owed on their home. Critical Illness Cover UK is often used with mortgage protection/life insurance to have the benefit paid on diagnosis of a defined critical illness if this occurs before death, however another benefit payment will not be made on death.
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