Buying a house - what insurance do you need?
If you’ve recently bought your first home, or upgraded to a new home, your lender or mortgage adviser may have talked to you about life or mortgage insurance.
But do you know the difference between them? Here we take a look at these two types of cover, and how each can benefit you and your family.
MORTGAGE INSURANCE
Depending on the policy (some will cover you for mortgage repayments if you are off work ill or injured as well), you might find that this type of cover only pays off your mortgage in the event of your death.
The payment will go straight to the lender, rather than to any loved ones. This means that, at the very least, your family will have a freehold house they can live in – and possibly sell to downsize and free up some capital. Mortgage insurance, however, doesn’t usually give your loved ones any additional funds for other needs.
LIFE INSURANCE
Unlike mortgage insurance, life insurance is not linked to your mortgage. The money either gets paid out to the policy owner or into the insured’s estate – meaning it can be used for whatever the beneficiary (receiver of the money) decides they want to use it for.
Another feature of life insurance is that you can have as much cover as you can either afford or demonstrate you have the need for. This means that not only can you make provision for the mortgage to be paid off, you can also include some additional funds to cover funeral costs, other debts or childcare or education costs.
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Poll: Is it ok to regift something that you have been given?
🎁 Holiday Gift Chat!
Do you ever regift?
What’s your take on asking for a receipt if a gift doesn’t fit?
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79.3% Yes! It's better to regift what I don't need
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20.7% No. It's the thought and effort that matters
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