Mortgage Life Insurance

• What is Mortgage Life Insurance?

  Mortgage Life Insurance (also known as decreasing life insurance) is a type of cover that can help you ensure your family can still pay off the mortgage if you unexpectedly pass away. If you die during the policy term, your family will receive a cash lump sum once they have made a claim. Mortgage Life Insurance can be a great way to ensure that your loved ones can continue to live in your family home should you pass away.

• How does Mortgage Life Insurance work?

  At the start of your policy you’ll choose a cover amount that would be enough to help with mortgage repayments should you die. You’ll also choose how long you want your policy to last and agree how much your monthly payments will be.
  
  Over time, as your outstanding mortgage amount decreases, your benefit amount decreases over the policy term based on a fixed mortgage interest rate of 8%.
  
  When it's time to claim, if your benefit amount is less than the outstanding mortgage, we'll pay the difference. That's called the Mortgage Guarantee and one of the benefits of choosing FRANKLi. There are certain terms that need to met in order to qualify for the Mortgage Guarantee. You can find all of the details of these conditions within the keys facts document.  

• Do you have to have Life Insurance with a mortgage?

  This depends on your mortgage provider. Some providers insist that you have Mortgage Life Insurance in place, while others don’t. Regardless of whether or not it’s a requirement, Mortgage Life Insurance could make all the difference to your loved ones should you pass away unexpectedly. If you believe that your family would struggle to keep up with mortgage repayments following your death, it could be worthwhile putting some financial protection in place.

• How much cover do I need for a Mortgage Life Insurance policy?

  It can be hard to work out exactly how much Mortgage Life Insurance cover you really need. You want to strike the right balance to make sure you don’t over or under insure yourself. To do this, you should choose a benefit amount that is high enough to help cover your mortgage and any other future needs of your family, while also making sure you can afford to pay the regular monthly premiums.

• How much does Mortgage Life Insurance cost?

  The cost of Mortgage Life Insurance varies from person to person and depends on a few factors including your age, your current health status, your occupation, and your smoker status. Your chosen benefit amount and term length will also affect the cost of your monthly premiums. For example, you could get £100,000 worth of cover for as little as £4.84 per month. This is for a 32-year-old non-smoker over a 20-year term.

• How long do I need to make payments for?

  When you’re taking out your policy, you will choose a policy term. This refers to how long you want your cover to last.  A policy term can be between 5 and 40 years however it must end by the policy anniversary on or following the attainment of age 89.  You will then pay the agreed monthly premium until your policy term is completed. If you miss two consecutive monthly payments, your cover will end.

• Will FRANKLi Mortgage Life Insurance pay off my mortgage if I die?

  At the start of your policy you'll choose a benefit amount that you believe is high enough to cover your mortgage should you unexpectedly pass away. We understand that an outstanding mortgage is a concern for you, that's why we also offer the Mortgage Guarantee. With this benefit, if you pass away during your policy and your cover amount exceeds how much is left on your mortgage, then it can cover it. You should bear in mind that in order for the mortgage guarantee to be applied there are certain terms and conditions. You can find the detail in our key facts document. Over time, as the amount you pay on your mortgage goes down, so does your mortgage cover.

• What is the difference between Life Insurance and Mortgage Life Insurance?

  Life Insurance, also known as ‘level cover’, has a set amount of cover throughout the whole term of the policy. You decide how much cover you want at the start of your policy and it doesn’t change. Your premiums stay the same throughout your policy.
  
  Decreasing life insurance, or Mortgage Life Insurance, will reduce over the term of the policy. The benefit amount decreases over the policy term based on a fixed mortgage interest rate of 8%. This type of life insurance is typically used to cover specific debts or loans, like your mortgage. Your premiums will also remain the same throughout the policy. 

• Who can get Mortgage Life Insurance?

  If you're a UK resident aged 18-84 and you pass our health and lifestyle questions, then you can apply for FRANKLi Mortgage Life Insurance. In general, your life insurance policy will be cheaper the younger you are when you take it out.

• What happens to my mortgage if I die?

  If you don't have Life Insurance or Mortgage Life Insurance in place and you have taken out a mortgage with a spouse or partner, then in the event of your death, your spouse or partner must continue to pay that mortgage.

  
  If you have taken out a mortgage on your own, your home will become part of your estate and can be used to help pay off any outstanding debts you may have. 

• Will I need to provide medical information?

  Not with FRANKLi. There are no medicals or blood tests required, we will only ask you a few health and lifestyle questions. 

• Can I add critical illness cover to my Mortgage Life Insurance?

  At the moment FRANKLi do not offer critical illness cover. If you have any questions about FRANKLi Mortgage Life Insurance, you can call us today and one of our friendly UK based team will talk you through your options.

• When does my policy start?

  Your policy to starts straight away. You will have immediate cover from day one of your policy (except if death is the result of self-inflicted injury in the first 12 months).

• Does it matter what type of mortgage I have?

  FRANKLi Mortgage Life Insurance is suitable for people with most types of mortgages. A situation where Mortgage Life Insurance may not be suitable is if you have an interest only mortgage.

• Can I cancel my policy if I no longer need it?

  Yes, you can cancel your policy. You have a 30-day cooling-off period from the date you receive your policy to make sure you're happy with your cover. If you're not, and you choose to cancel within that 30-day period, you can get a full refund as long as no valid claim has been made.

  If you cancel your Mortgage Life Insurance policy after your 30-day cooling-off period, you will not get back any of the payments you made. It's also important to note that there is no cash-in value for your policy at any time.

• Can I make changes to my FRANKLi Mortgage Life Insurance?

  We understand that life is always changing, and you need cover that can keep up with you. That’s why you can apply to reduce your benefit amount if needed with no nasty administration fees. You can also apply to take out a new policy or remove a life insured if you need to.  

• Can I put a Mortgage Life Insurance policy in trust?

  Yes, you can put your Mortgage Life Insurance into a trust. It’s a straight-forward legal arrangement that allows you to leave your assets to your chosen beneficiaries. Since mortgage life insurance is designed to help cover mortgage repayments in the event of your death, putting it into a trust could stop it being subject to inheritance tax. 

  One of our friendly team can help you put your FRANKLi Mortgage Life Insurance policy into a trust today, find out how and get more information here. Before putting your policy into a trust, please speak with a financial advisor or solicitor who can give you additional information and guidance.

• Can I reduce my monthly payments?

  If your monthly payments are causing a strain on your finances, or you would simply like to pay less each month, you can apply to make changes to your policy at no additional cost. 

• Can I take out additional cover with Mortgage Life Insurance?

  At the moment with FRANKLi Mortgage Life Insurance, you cannot take out any additional cover. If you feel like you might need some extra cover you can apply to take out a new policy. If you have any specific concerns or needs that you would like to discuss, you can call us today and one of our friendly UK based team can talk you through your options.

• Who is responsible for mortgage payments after death?

  If you have taken out a mortgage with a spouse or partner, then in the event of your death, your spouse or partner would be responsible for making mortgage repayments.
  
  If you have taken out a mortgage on your own, your home will become part of your estate and could be used to help pay off any outstanding debts you may have. 

• Will I be covered if my mortgage provider goes bust?

  If your mortgage provider goes bust during the period of your mortgage and your policy term, you will still be covered.
  In this situation, the Financial Service Compensation Scheme (FSCS) will transfer your mortgage to another provider or issue a replacement. Your FRANKLi Mortgage Life Insurance policy will still be valid and you will still be covered. FRANKLi are also protected by the FSCS. See our policy terms & conditions for more details.

• Should I have two single policies or joint cover?

  If you’re in a relationship and you and your partner are both considering taking out a Mortgage Life Insurance policy, you may wonder whether you should opt for single or joint cover.
  
  A single policy is cover for just one person. It pays out if that person dies within the policy term, as long as you pay your premiums. The cost of a single policy will depends on things like your age, health, job and lifestyle.
  
  A joint Life Insurance policy is cover for two people, with one monthly premium. The key difference is that it pays out when the first policyholder dies, at which point the cover will end. With a joint policy, the monthly premiums will be calculated according to both partners. That means that both partners’ ages, health, jobs and lifestyle will be taken into account.
  
  Whether you choose a joint or single policy will depend on your own individual circumstances. If you need help deciding, you can call us today and one of our friendly UK based team will help you explore your options.

• What isn't covered by Mortgage Life Insurance?

  Our Mortgage Life Insurance policies won't cover you if you die outside of your policy term. This means once your chosen term is completed, your cover will end. You are not covered if you die by self-inflicted injury or pass away from a terminal illness within the first 12 months of your policy. It's also worth noting that there is no cash-in value at any point.