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Is life insurance compulsory with a mortgage?

Life insurance is not usually compulsory, but it is often a good idea.

Some lenders require that the borrower has life cover as a condition of their loan.  There are good reasons for this. 

  • If one, or both, of the borrowers die, the loan can be repaid from the life insurance proceeds of the deceased, which should mean that any surviving family members don't have to worry. 
  • The death of family can be extremely stressful and the added complication of needing to meet the mortgage commitments may be simply too hard on the surviving family. 
  • It is a good idea to plan for the worst (and hope for the best) by ensuring that your loan can be repaid and surviving family are not forced to meet commitments which may be very difficult and stressful to maintain. 

 

We recommend satisfactory life insurance is held to repay the mortgage so that the surviving family are not forced to meet mortgage payments at this time.