This plan can be used for interest–only and also for repayment mortgages.

With this type of policy it will protect the amount borrowed and unlike the mortgage protection will not reduce at any time. The cover stays level.

With an interest–only mortgage the cover will protect the amount borrowed, but you would need some form of investment or consistent reducing of your mortgage to clear the debt, however should death occur this plan will pay it off.

If you use this with a repayment mortgage what this does is it creates after the first year, a surplus, the more your mortgage reduces the more can be allocated to your next of kin. E.g. A mortgage for £200000, with level term cover for the same amount, after 10 years mortgage payment the mortgage outstanding may now be hypothetically say £160000, should death occur at this point, £200000 is paid out, mortgage of £160000 is paid off with an excess of £40000 for the beneficiary.

In most cases the Level Term Plan only costs a few pounds more that the Mortgage Protection.

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