How does it work?

For most people, a Mortgage Insurance package is made up of Life Cover and Repayment Cover.

Life Cover

Life Cover is simple. You choose a lump sum, and this sum is paid out if the insured person dies or is terminally ill (which means that they have 12 months or fewer to live).

You can insure any sum you'd like - you can match your mortgage, or add extra cover, for example to take care of debt or provide a replacement income for family.

What's covered

Life insurance covers any cause of death - e.g. sickness, accident, etc.

What's not covered?

The only standard "exclusion" is for suicide within the first 13 months of setting up the policy.

Repayment Cover

Like Life Cover, Repayment Cover is pretty straightforward. You choose an amount to protect (usually to match your ongoing repayments), a "Wait Period", and a "Payment Period". If you become injured or ill and can't work, once your Wait Period has finished, the insurer will make monthly claim payments. These continue until you're able to return to work or until the end of your Payment Period, whichever is first.

What's covered

Insurers have some exclusions (for example self-inflicted injuries), but aside from these, any health issue that keeps you off work is covered.

What's not covered?

Repayment Cover protects you if you can't work for health reasons. You can add cover for redundancy with some insurers, however this is usually not part of standard Repayment Cover.