How Life Insurance Protects a Remortgage?

How Life Insurance Protects a Remortgage?

Life Insurance Protects

Reasons to Use a Remortgage

A remortgage is a mortgage used to pay off your current mortgage and is something that everyone should consider during their mortgage repayment period. But why? The first reason to use remortgage is to save money. Because mortgages are usually for a long period, a small saving on mortgage repayment can save you a considerable amount of money overall. Therefore, customers should always look for mortgages at a better rate or shorten the mortgage period to reduce their costs.

When your mortgage agreement expires, the lender will apply a standard variable rate to your mortgage, which will cost you much money. In this case, you need to act quickly and find an alternative solution or pay the costs associated with this alternative.

A remortgage can be used as a tool to free up shares of your property. Whether you’re looking to improve your home, buy a car, combine debt, or whatever, this method will cost you less than short-term unsecured mortgages.

How Does Remortgage Work?

The remortgage process is very similar to applying for a new mortgage, but there is no property in the contract, and the steps are simple. In many cases, the steps are quick and online, but some steps need to be taken. The value of your property should be assessed, and an intermediary (lawyer, consultant or broker) should carry out the mortgage transfer process. Many remortgage products on the market follow similar steps.

Main Features of Mortgage Protection Insurance

Mortgage protection insurance is life insurance with a declining capital, and the insurance capital decreases with time. The liability of this insurance policy begins on the date of commencement of the insurance policy, and the capital equivalent will decrease in the following years and reach zero at the expiration of the term. This means that if the insured death or illness occurs in the first year in life insurance, the entire capital and if it appears in subsequent years, the balance will be paid from the date of death until the end of the mortgage instalment period.

Mortgage Protection Insurance

Primary Coverage

The prominent coverage of this insurance policy is “death or illness”, in which the insurer undertakes to pay the rest of the large mortgage instalments without interest if the insured (borrower) dies. The capital in this insurance policy is equal to the original mortgage amount received.

Mortgage Protection Insurance Exceptions

Premium mortgage protection insurance is non-refundable unless the applicant is over 70 years of age and incorrectly issued the insurance policy. The premium is also refundable if an applicant’s mortgage has been settled and issued this insurance by mistake. However, like most insurances, mortgage protection insurance has exceptions that if the death or illness of an applicant occurs under these conditions, the insurance will not pay damages. Exceptions to this insurance are:

  • Life insurance will not pay any damages if the insurer dies in war, military operations, and insurgency.
  • Life insurance also does not pay for arrears and late payments.

The Role of Remortgage Broker

Finding remortgage deals and identifying life insurance coverage based on your financial situation is complicated and challenging as many factors affect them.  However, AWS Mortgages specialist advisors guide you through all the steps of getting a remortgage so that you can fulfil these steps safely and without wasting time. Whatever your need for a remortgage, you can talk with them to get the most out of your remortgage benefits. Meantime, AWS Mortgages advisors will help you resolve your worries about your mortgage non-payment due to death and disability and bring peace of mind to you and your family. Over the course of a year and in line with your financial situation, they will be able to provide the best life insurance deals.

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