Life Assurance

Life assurance is a form of insurance that provides a payout when the policyholder dies. Such policies can be created to run alongside your mortgage. It means that if you die, the policy will pay out enough money to clear or pay off part of the outstanding mortgage debt.

Life assurance often gets mixed up with life insurance, yet the two do have differences. Insurance is designed to provide a payment upon death if the policy is still active. Policies can provide a set amount for the duration of the policy or be agreed on a decreasing basis. This means that as the mortgage drops (usually the loan the insurance is designed to cover), the insurance payout would drop in line with it.

If you choose life assurance instead, it means you will be covered until the day you die. Even if you pass on aged 92 and your mortgage is long since paid off, the life assurance would pay out and be added to your estate to be divided between the people named in your will.

Life assurance does, therefore, offer more benefits than insurance would. It is guaranteed to generate a payout upon death, whenever that may be. This does mean you will be paying monthly fees for that privilege, of course. If you simply want to make sure a payout would be triggered to cover the mortgage in the event of your death, a life insurance policy may be better for you. It is wise to seek advice on the matter before making your selection.