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Tesco’s Mortgage Protection

A Mortgage Protection policy protects your home in the event of your death. If you pass away within the policy term, Tesco will pay out a cash sum large enough to pay off your mortgage. This will ensure that your family can continue living in your home after your death. With this policy, the cash sum reduces in line with your repayment mortgage; as you pay down your mortgage, the final amount of your policy’s cash payment decreases. Tesco calculates this figure based on a fixed interest rate of 12 percent per annum. This policy is intended for repayment mortgages only. With interest-only mortgages, Tesco only covers the interest payments; once your cover ends, your loved ones will be left paying down the entire mortgage loan.

Tesco covers terminal illnesses for the entire policy term, excluding the last 18 months. This policy is also available as a Joint Life cover; this covers two people under the same policy. If one person listed on the policy dies, the other can pay off the shared mortgage with the cash payment. In case of death, the cash payment does not go directly to the mortgage provider. With a Joint Life cover, Tesco will send the payment to the other person listed on the policy. If you have a trust, the payment will go directly to those listed on your trust. If you have made no other specifications, the cash will go to your estate. The payment will go to a lender only if you have formally assigned one to your policy.

For a £100,000 cover with a policy term of 20 years, a healthy, nonsmoking male will pay around £5.34 a month, while a woman will pay £5.00. Your own premium depends on several circumstances, including your age and your occupation. You choose your level of cover and the length of your policy; these two factors will also affect your monthly premium. Tesco guarantees that your premiums will remain the same throughout the life of your policy.