Mortgage life insurance 23 September 2022 at 6:16AM in Insurance & life assurance 1 reply 46 views

Earl_Grey1

Hi,  we have been overpaying our mortgage for a number of years - (currently around £15,000 in overpayments) 

We have a decreasing term life insurance policy (with a different company) designed to pay off the mortgage should one of us die.

My query is - Would the overpayments we have made be included, or be refunded to us,  as they were not part of the original loan amount insured ?

HappyHarry

The life assurance is totally separate, and will pay out approximately what the outstanding mortgage would have been if you had made no overpayments.

e.g. If the outstanding mortgage without overpayments would have been £150,000 and is actually £130,000 due to overpayments, then the life assurance will still pay out £150,000.