Life insurance will pay out an agreed amount (known as ‘Sum Assured’) in a lump sum to repay your mortgage should you die.

If you had a repayment mortgage, the amount of cover (or ‘Sum Assured’) would typically decrease at a similar level to your mortgage.

If you had an interest only mortgage, you would probably have a level term policy. This means that the amount of cover would remain the same as your total debt would not change over the term of the mortgage.

Critical illness cover will pay out the amount agreed in a lump sum should you be diagnosed with a defined critical illness. This amount could be the same as your mortgage, or after budgeting discussions could be a specific amount of cover.

Like life insurance, this type of policy can be decreasing or level. It is recommended to have decreasing cover if you are protecting an entire repayment mortgage amount, for any other amounts of protection, we recommend having it on a level basis meaning the amount covered stays the same for the life of the policy.

Income protection protects a proportion of your income (up to a maximum of 65%) against accident or sickness. This means if you are unable to work due to accident or sickness for more than the deferred period (waiting period) the insurer will pay you a monthly amount (known as ‘benefit’). There are 2 further options – you can choose to receive the benefit until you reach your desired retirement age OR you can choose to receive the benefit for a maximum or two years per claim. The latter is usually cheaper.

Family income benefit is a protection option that will pay out should you die, but rather than receiving a lump sum (like life insurance) you will receive an annual amount – usually similar to a salary. Although you won’t receive enough to repay the mortgage, it will replace an income to help with household bills & maintaining your lifestyle.