Life Cover and Your Mortgage: Why Most People Put It Off
Nobody likes thinking about worst case scenarios. Especially not when you are in the middle of one of the most exciting things you will ever do, buying a home, starting a life somewhere, building something that is genuinely yours.
So it makes complete sense that life cover gets pushed to the bottom of the list. It is uncomfortable to think about, it feels like something you can sort out later and honestly there are about fifty other things demanding your attention at the same time.
But here is the thing. Later has a habit of never arriving.
What Life Cover Actually Does
Life cover pays out a lump sum to the people you love if you die during the term of the policy. For most homeowners, that means the mortgage gets paid off. The people left behind are not suddenly facing a debt they cannot manage on top of everything else they are dealing with.
That is it. That is what it does. And when you put it like that, it is hard to argue against.
The Reason Most People Put It Off
In our experience it is rarely about the cost. Life cover is genuinely more affordable than most people expect, often just a few pounds a week depending on your age, health and the level of cover you need.
The real reason people put it off is that sorting it out means having a conversation about dying. And that is an uncomfortable conversation to have when you are 28 and have just picked up the keys to your first home.
We get that. We really do.
But the people who need this most are often the youngest, the healthiest and the ones who feel least like they need to worry about it. Because life cover is not about expecting the worst. It is about making sure the worst does not destroy everything you have worked for if it does happen.
What About If You Have Cover Through Work?
Some employers offer death in service benefits, which typically pay out a multiple of your salary if you die while employed. It is worth knowing what yours covers.
But it is also worth knowing what it does not cover. Death in service ends when your employment ends. It does not follow you if you change jobs, go self-employed or are made redundant. And it may not be enough to cover your full mortgage balance anyway.
Having your own policy in place means you are covered regardless of what happens with your career.
It Is One Conversation
Getting life cover sorted does not need to be a big stressful process. It is one conversation, a bit of paperwork and then it is done. Most people tell us afterwards that they feel relieved rather than anything else.
If you have a mortgage and you do not have life cover in place, that is worth addressing sooner rather than later. Not because something bad is going to happen, but because it almost certainly will not, and it is much better to have it in place and never need it than the other way around.
At City Mortgage Solutions, we talk about protection as part of every mortgage conversation. It is not an add-on for us, it is part of looking after our clients properly. If you want to understand what cover might look like for your situation, get in touch with our team and we will have an honest chat about it.
You might also find it useful to read our guide on mortgage affordability if you are still working out what you can borrow, or our piece on the biggest first-time buyer mistake if you are just getting started.
Risk Warning: Your home may be repossessed if you do not keep up repayments on your mortgage.
Frequently Asked Questions
Do I legally need life cover when I get a mortgage?
No, it is not a legal requirement. But most mortgage advisers, including us, will always recommend having it in place.
How much does life cover cost?
It depends on your age, health, how much cover you need and the length of the policy. For many younger, healthy applicants it works out at just a few pounds a week.
What is the difference between life cover and critical illness cover?
Life cover pays out if you die. Critical illness cover pays out a lump sum if you are diagnosed with a serious condition like cancer or a heart attack. They cover different things and many people have both.
Can I get life cover if I have an existing health condition?
Often yes, though the terms and cost may differ. A broker can help you find the right policy for your circumstances.
What happens to my life cover if I move house or remortgage?
Your policy stays in place regardless. If your mortgage changes significantly it is worth reviewing whether your level of cover still makes sense, but the policy itself does not disappear.