You want to have a home of your own, but one question is bothering you: do you need life insurance for a mortgage? In this article, we’ll answer your question and discuss the pros and cons of life insurance policies when you’re applying for a mortgage and once you have one. We’ll also take a quick look at life insurance options if you’re living with preexisting health conditions, since you may be finding this something of a thorny problem.

Do You Need Life Insurance for a Mortgage in the UK?

When you take out a mortgage, the property itself acts as security against your loan. As a result, you don’t need life insurance to get a mortgage in the UK. Banks are perfectly happy to grant you a mortgage with or without life insurance because they know that if you were to die, they can sell the property to recover their costs.

Of course, surviving family members will be offered an opportunity to take over the mortgage repayments or else settle them with a lump sum. If they don’t have the money, or don’t want the property, the bank reverts to plan B and sells it.

What Life Insurance Do You Need for a Mortgage if You Want to Leave a Legacy?

If you’re worried about your spouse and children being unable to keep the family home if you were to die, then life insurance is the obvious solution. However, you would like to be sure you’re getting the cover your family will need. With bills to pay right now, you’d like to pay premiums that are as low as possible while still making sufficient provision to settle the debt. So, your first step is to shop around. While doing so, do consider other needs you may want to provide for, for example, you might want to leave your family an income to make up for the loss of yours or make provision for your children’s education.

If your budget is very tight, create two scenarios for cover: the ideal one, and a basic minimum requirement. You may find that you can afford the premiums you’d have to pay for a death benefit that does much more than just cover the balance on your mortgage.

Term Life Insurance is a Practical Option

Since your mortgage runs for a set period, choosing life insurance that covers that period is the sensible choice. Consider this: if you go for whole life insurance that pays out no matter when you die, your insurers know that there will definitely be a claim at some time or another. If you choose term life insurance, there’s a chance that you will outlive it and they won’t have to pay any death benefits. As you’d expect, this means that term life insurance offers you better cover in exchange for lower premiums.

You can even choose life insurance that has a decreasing death benefit as time goes on. In other words, the death benefit decreases as the amount owed on your mortgage shrinks. Once again, this could mean lower premiums and adequate cover to match your intentions.

Life Insurance With Pre-Existing Conditions

If you’re living with a condition like diabetes, getting reasonably-priced insurance and quick approval for your cover can be difficult. Insurers may be unwilling to offer you cover, or they might put you through a lengthy application process. They may ask you for doctors’ reports, a look at your medical history, and then leave you hanging on for months before offering you expensive insurance or even no insurance at all.

Since you’re thinking of buying a home, and may even have your eye on one right now, that waiting time could cost you an opportunity to buy a property you really want. You could just go ahead and take a mortgage without life cover, but it may be a risky decision. There’s no way around it: you have to be frank about your health when applying for life insurance. Hiding a preexisting condition means that your insurer can refuse to pay a death benefit, particularly if you were to die soon after taking out the policy.

Fortunately, a team of doctors and insurance experts have been pondering this problem and have come up with an elegant solution. Here’s what you need to know.

Life Insurance for People With Type 2 Diabetes

Doctors know that a person who manages their diabetes well can still enjoy many years of excellent health. If you have diabetes and a family that depends on you, you’ll be prioritising your health and making lifestyle changes to improve your prognosis. As a result, you may not be as much of a “bad risk” as many insurance companies may think you are. But because they don't specialise in insurance for people with diabetes, most insurers will put you in a “box” that assumes you’re unwell and therefore high-risk.

At Blueberry Life, we don’t require much information to approve your life insurance policy and we specialise in helping people with chronic conditions to get the peace of mind they need. Simply give us an accurate snapshot of your current health indicators, and we’ll tailor a life insurance policy to match.

We’re confident that if you were to compare life insurance policies from general insurance providers with ours, you’ll find that Blueberry Life offers a better solution. That’s one of the reasons why we’re making news around the UK. We’re unique because we recognise you as an individual. We never generalise. Find out more about life insurance for people living with chronic conditions today.

Isn’t it time you chose Blueberry Life? It’s as easy as filling out an online application - all you need is 5 minutes to tell us about yourself.

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This is a blog and should not be taken as financial advice.