With level term products, the sum assured will remain for the duration of your policy.
For example, if you insure for a sum of £200,000, that figure would never reduce on your policy.
Therefore, for mortgages paid on capital and interest basis, if a claim is made after your first mortgage payment, the sum insured will be higher than your outstanding loan sum.
This means that if a fatality occurred to a borrower, and a claim was made, the mortgage would be redeemed and a cash surplus would be provided to the beneficiary.
Level term is the more expensive of the two life insurance products because of this surplus.
However, our advisers often recommend level term insurance.
This is because, from our experience, after borrowers have experienced such trauma derived from the fatality of a loved one, the cash surplus provides extra security for the client to mentally recover.
Authorised and regulated by the Financial Conduct Authority. No: 301141
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