Cover built around the mortgage
Mortgage protection aims to clear the loan if you die during the term. With a repayment mortgage, the balance falls each year, so decreasing term cover can shrink alongside it, often at a lower premium than level cover.
With an interest-only mortgage, the balance stays the same until the end, so you need level cover for the full amount. Check the interest rate assumptions on decreasing cover too, because if your mortgage rate is higher, a gap can open up.
Your mortgage will probably change over the years. Remortgaging, moving home or borrowing more can leave your cover out of step with the loan. Review it each time you change your mortgage, and ask whether your policy lets you add cover without health questions when you borrow more.
What clearing the mortgage leaves out
A paid-off house is a huge help, but your family still needs to eat, heat the home, run a car and pay for childcare. If you earned most of the household income, those bills could quickly become hard to meet.
Family cover is designed for this. It can give a lump sum to invest, or a monthly income through family income benefit, until your children are grown.
Work out your monthly household costs, leaving out the mortgage payment that the other cover would clear. Then decide how many years your family would need that income. The answer gives you the amount for family income benefit or the size of a level lump sum.
- Everyday household bills
- Childcare and school costs
- Car finance and other debts
- Support for a partner who reduces work hours
Building cover for both
One approach is a single level policy large enough to clear the mortgage and leave money over. Another is to split it: decreasing cover for the mortgage and family income benefit for living costs. The split often costs less, because each policy is shaped around its own need.
Think about critical illness cover too. Adding it to mortgage cover could clear the loan if you are diagnosed with a covered condition, easing pressure during treatment.
Two single policies, one for each partner, mean the survivor keeps their own cover after the first payout. That can matter if they go on to take on new debts or start a new family.
How Hi Tomorrow helps you balance the two
We start with your mortgage statement and your household budget, then show you a few ways to cover both, with the premiums side by side. You pick the mix that suits you. We compare the insurers on our panel, help with the application, and can write each policy in trust so the payout reaches your family quickly.
Already hold mortgage cover? Bring the details. We will check whether it still matches your loan and whether a separate family policy would fill the gap, so you keep anything that still works.