Life assurance & impact of interest rates

M

mickaxe

Registered User
Messages
37
Hello,

I am currently looking at decreasing term life assurance quotes and have a question - one provider gave quotes to repay @ interest rates of up to 5%, up to 6% and up to 7%. My understanding was that your policy would pay the outstanding amount regardless - this is obviously not the case is it? Which option would people advise?

Regards,
Mickaxe.
 
Your understanding is correct ie Mortgage Protection Life Cover for a standard annuity mortgage pays the amount outstanding on your mortgage if you die. The other broker may be refering to Mortgage Repayment Cover which is a different beast altogether.
 
I thought that decreasing term mortgage protection life assurance decreased the amount payable based on some projected reduction in the capital outstanding so the amount payable might be less than, equal or greater than the actual amount outstanding in the event of a claim? I could be wrong though. Perhaps the terms & conditions of the policy clarify? I don't really understand the reference to interest rates above unless it's somehow linked to how underwriters/actuaries project how the capital outstanding will be reduced over the term of the mortgage?
 
You must log in or register to reply here.
Back
Top