Why do I need life insurance?

14th May 2021

Life insurance and mortgages

You’ve had your offer accepted on the house you want to buy, and you’ve just had confirmation of your mortgage approval. Hurray! Now all that’s left to do is sort out the insurances you need before moving into your brand new home!

But with so many different insurance policies available, it’s not always clear which are a legal requirement to get a mortgage, and which aren’t.

Do I need to take out life insurance to get a mortgage?

Contrary to popular belief, you do not need to take out life insurance to get a mortgage.

One of the main reasons why people take out life insurance is to ensure that their families can carry on paying the mortgage, in the event of your death. The consequences of not being able to pay your mortgage could end in your family being forced to sell their home and move out.

Why do you need life insurance?

We understand that insurance isn’t the nicest thing to talk about, but we want you to be able to stay in your home no matter what might come your way.

Not only can we make sure you stay in your home, we can also help ensure you maintain your current lifestyle, so your family don’t have to go without things such as family holidays, Christmas and birthday presents, and you don’t have to worry about paying the bills every month.

Unfortunately, we cannot always predict the path that our lives will take. Certain things can take us by surprise, including:

  • Unemployment
  • Illness
  • Accidents
  • Death

Depending on your situation, there could be various outcomes that leave either yourself, your family, or both, under a certain amount of pressure that could’ve been avoided with a little forward-thinking and help of our protection advisers.

Worst case scenario: how could you pay your mortgage without your salary?

If you’re the breadwinner in your household, do you know who would pay your mortgage off if you were unable to work for 6+ months, lose your job, or even worse, if you were involved in an accident and died? These aren’t nice things to think about but it’s important to consider all eventualities when it comes to protecting yourself and your family. And having life insurance could protect you from that, and prevent unnecessary worry.

What insurance do you need for a mortgage?

The only insurance you need as a legal requirement when getting a mortgage is buildings insurance.

Buildings insurance covers your home against any damage that may need to be repaired. This type of insurance only applies to the structural aspects of your home i.e. the walls, roof, floors, fixtures and fittings etc.—not the actual contents of it.

However, there are lots of other types of insurance that will benefit you and your family’s future. Mortgage insurance covers the cost of your mortgage if you become unwell or unable to pay the bills and similar to life insurance, it offers a level of security against the worst. Contents insurance is another good one to consider when buying a home, protecting your belongings within the house from theft or natural damage.

How we can help keep you protected

Our protection specialists can look at any provisions you currently have in place to see if these are sufficient enough for what you need.

Perhaps you have employment benefits, such as sick pay or death in service which could help make things a bit more comfortable for you. However, you may find that this isn’t enough to sustain your current standard of living, or even less than this. If this is the case, we can look at what solutions there are that could, for instance, give your dependents a long-term wage, or pay off your mortgage entirely. And the best part is, these provisions don’t even need to be expensive!

Bespoke solutions and extra benefits

Here at Charters, we understand that there are no two people the same. That is why we look at every case on an individual basis so you are getting the cover that is specific to you.

If you would like more information, feel free to get in touch with one of our expert advisers. With mortgage and protection advisers in Winchester, Southampton, Farnham, Bishops Waltham, Alton, Chandlers Ford, Alresford, Romsey and Park Gate, you are never too far from insurance advice.

< Back to News and Blog

We would highly recommend Simon and the team at MAB.

Simon is extremely professional, provided honest advice and was able to find and talk us through our financial options and the best products available to us.

His knowledge in the field is fantastic and he was always willing to talk through any complex situations and clarify things (mainly for myself!) We were on a tight timeframe to exchange and Simon and the team were able to arrange everything we needed in time.

I also have to thank Cara in the team, who has been incredible in keeping us updated on progress, explaining things in Layman’s terms and going over and above to chase paperwork/updates for us. We cannot thank the team at MAB enough.

Imogen W

February 2020

Get the Right Mortgage Advice