Does life cover end when mortgage is payed ?

[tech3]

we are paying off our mortgage 5 years early.The life insurance pemium initially arranged with the mortgage is included in the monthly repayment.
when the mortgage is paid off, will the life cover cease ? (or can we arrange to keep this on )
I have an illness which will make it difficult if not prohibitive for me to receive new life insurance therefore in keeping the existing insurance policy would make one less worry ......

 

[ClubMan]

It should be up to you whether or not the cover ceases now or in 5 years (or later if convertible).

If the existing policy is decreasing term then if you keep it on and have cause to claim on it then it will only pay out roughly what would have been outstanding on the original mortgage in the next 5 years. If it is level term then it will pay out the original capital amount. If it is level and convertible term then you may be able to extend the cover beyond the original term. Remember that mortgage protection life assurance is seldom a substitute for general life assurance. Certainly so in this case if the cover was decreasing term.

This key topic is a useful reference on the different types of mortgage protection life assurance policies.

Mortgage Protection and Mortgage Repayment Protection Policies