A single homeowner like yourself might not be married or have any plans to settle down with kids soon, but that doesn’t mean you should rule out taking out any life insurance. There are reasons as to why single homeowners would benefit from taking out life cover.
If something unfortunate were to happen, having a life policy in place can support your family in dealing with unpaid debts such as outstanding mortgage payments.
Should the policyholder (the person with the life cover) passes whilst still making mortgage payments. The policy pays out a lump sum, equal to the cost of the current home loan, to cover the remaining mortgage debts.
If you are living with a partner or do have kids, the cover might get extended as a means of providing your dependents with an income boost to cover any living costs for the time being.
Although extra protection is not always necessary for single cover applicants, we firmly believe taking out any insurance to cover your mortgage is worth doing.
If a single homeowner passes before their mortgage has been fully paid off, their bank or building society can look to pay back the mortgage loan from their late customer’s estate, i.e., their collective belongings (accumulated assets is a term you might see used for this).
In most cases, we find that to pay off the remaining mortgage balance, and the property will get sold at auction. If the home has fallen into negative equity, the lender has the right to demand that the estate make up the difference.
The lender does have the right to demand that the property gets sold, and any family members cannot make up any shortfall. Additionally, if the probate process happens to be drawn out, the lender can continue to add interest charges, increasing the total amount to be paid.
Taking out life insurance will help to prevent these problems from occurring.
If you are looking at your options for potentially taking out life cover, please get in touch and speak to one of our dedicated protection advisors in Leeds.
If you have any intentions to become a first time buyer in Leeds or are already a homeowner with a change in circumstances, we recommend you to get on top of it now rather than late.