If you are topping up your mortgage, you could get a new mortgage protection policy for the total amount of your new mortgage, or just for the top-up amount. Compare the costs and benefits of both options. It may be cheaper to keep your original mortgage protection policy going, and buy another policy for the top-up amount. But check what it would cost you to cancel the original policy and replace it with a policy for the full amount of the new mortgage. Whether you are topping up your mortgage or extending the term and need to get a new policy, you may find that your premium is higher than the last time you took out cover. This is because you are older and your age affects your premium. However, if you have given up smoking, or if rates have come down since the last time you applied for cover, you may be able to get cheaper cover. It is worth shopping around to see which provider gives the best value - use our life insurance cost comparison to help you. If you switch your mortgage, your options depend on whether you have your own policy or a group policy through your lender. If you have your own policy, you can simply transfer it to your new lender. The premium and level of cover will be the same as before, as long the amount you borrow and the term of your mortgage does not change. If you have a policy through your lender’s group scheme, your lender will cancel the policy when you switch your mortgage. So, you will have to apply for cover again and it may cost you more, as you will be older than when you first took out the policy. And if you are not in good health, you will have to pay a higher premium or you may not be able to get cover at all. Before you switch your mortgage, make sure that you can get mortgage protection insurance if your current mortgage protection is through your lender’s scheme. If you pay off your mortgage earlier than planned, you can: â€cancel your mortgage protection cover and pay no further premiums or â€Keep the policy and pay premiums until the original end date. If you decide to cancel the mortgage protection cover, always check with the insurance company that the policy has been cancelled. Where the policy has been arranged through your lender, your lender will cancel the mortgage protection policy on your behalf but you may want to check to make sure. If the policy has not been cancelled by your lender, ask the insurance company what your lender needs to do to ensure the policy is cancelled and no more premiums are collected from you. Also make sure that if you have been paying premiums by direct debit, that you cancel the direct debit in writing. If you pay off your mortgage earlier than planned, it is a good time to consider whether you need additional life insurance. If you decide to keep your existing policy, it would no longer need to be used to clear your mortgage. So any benefit would be paid to your dependants if you died before the policy finished. This could be a useful source of extra life cover. On the other hand, you may decide to take out new life insurance, depending on your age and state of health. You may not have this option of keeping your mortgage protection policy if it was taken out through a group policy with your lender, as they will usually close off the policy when your mortgage is cleared.
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