InsuranceLecturer — Yes, life insurance is a form of protection insurance and these as there name suggests they are there to protect you against the worse happening. After all should you die your liaiblities ie your mortgage or loans will be passed as a liability to your next of kin.
If you are married then your mortgage could go to your husband or wife and it is there entire liaiblity to pay. If you are the bread winner in the family then this is even more important as there will be in some cases no way of repaying the debt for the remaining partner.
Life insurance will be a good way of paying these debts off, you can get a life insurance plan that will pay off your mortgage specifically and it will decrease along side your mortgage.
This is called mortgage insurance or decreasing insurance and it is designed to reduce its sum assured year by year alongside a decreasing mortgage. I have a level mortgage or interest only mortgage i hear you say, well level or term life insurance is the one for you to take out.
This means your life insurance sum assured will remain constant throughout the term. Overall it is important to protect any liabilities that you may have as you would not want them to be passed on to your relatives left behind.