Endowment and Mortgage Life Assurance

Gina_Webb

We currently have a joint mortgage. We are not married. Our initial mortgage was an £80,000 endownment policy. Due to it's under performance, we changed £30,000 to a repayment mortgage. We have since increased our mortgage to £150,000. We are now considering taking out a Mortgage Assurance policy for £100,000. If either of us die and the endowment pays out £80,000, we are aware that the mortgage assurance will pay out a decreasing amount of the £100,000 but what will happen to the £30,000 that is the extra that the endowment pays out on death? Would the mortgage assurance company then refuse to pay £30,000 because this is coverd by the endowment policy even though the endowment policy will only mature at £50,000?

Wakey2008

No

If you are over covered then the surplus goes into your estate.

One of the good things about endowments is that if your policy under performs (as yours is doing by 30k) the life policy does not decrease so on death it is still worth 80k.