Mortgage Protection cover also known as Mortgage Life Cover or Mortgage Life Assurance, is a lump sum payment payable to your mortgage lender in the event of your untimely death and clearing your outstanding mortgage. Your Life Cover reduces as your mortgage is paid off, making this the cheapest form of Life Cover. Mortgage Protection is often confused with Personal or Family Life Assurance which is used to reduce the financial burden on your loved ones in the event of your death. Typically this cover remains level or increases in line with inflation or a set amount.
Mortgage Protection is normally a legal requirement by your Mortgage provider before you will be allowed draw down your Mortgage and you have a responsibility to maintain this policy. While there is no requirement to renew your Mortgage Protection policy annually such as motor or home insurance, it is common practice for policy holders to shop around for lower premiums.
