Contact Us

Level Term Assurance

Level term life insurance can be a practical choice to safeguard an interest-only mortgage, providing security for your family without being overly costly. Here's how level term life insurance works in conjunction with an interest-only mortgage:

  • Coverage Amount: With an interest-only mortgage, the outstanding loan balance remains constant over time. To protect this specific amount, you can opt for a level term life insurance policy with a death benefit that matches the total outstanding mortgage debt. This ensures that if anything happens to you, the insurance payout will be enough to repay the entire mortgage balance.

  • Fixed Premiums: Level term life insurance offers consistent premiums throughout the policy term. This means your insurance costs will remain steady, making it easier for you to budget and plan for the future.

  • Financial Security for Your Family: In the unfortunate event of your passing, the level term life insurance will provide a lump sum payment to your chosen beneficiaries. They can use this payout to settle the remaining balance on the interest-only mortgage, relieving any financial burden and allowing your family to stay in the property without worrying about mortgage payments.

  • Flexibility in Beneficiaries: You have the flexibility to designate the beneficiaries of your level term life insurance policy. Typically, policyholders choose their spouse, children, or other loved ones to receive the death benefit.

  • Independent of Mortgage Terms: The level term life insurance coverage remains consistent throughout the policy term, irrespective of the mortgage term. This means the protection remains the same, regardless of whether your interest-only mortgage has a short or long term.

When considering the coverage amount for your level term life insurance, it's crucial to assess your family's financial needs and the mortgage amount. Seeking guidance from a reliable financial advisor, like Austin Friars, can assist you in determining the appropriate coverage to ensure your family is adequately protected in any unforeseen circumstances. Combining level term life insurance with your interest-only mortgage helps build a solid financial safety net, providing your loved ones with peace of mind and a secure future.