First-time buyer insurance

Choosing between life insurance products after buying your first home

There are a few different insurance products available and worth considering as a first-time buyer. Depending on your provider, you might be able to add on extra policies too.

Do I need life insurance after buying my first property?

You are not legally obliged to take out life insurance as a first-time buyer. But there are several benefits to doing so. If you do not have life insurance and you die before the end of the mortgage term your house may need to be sold in order to raise the money required to repay the mortgage.

But, having life insurance to cover your mortgage means your loved ones could repay the mortgage and own the property outright. That means they could stay in the family home. Dependents include but aren’t exclusive to your partner, children or anyone else who relies on you, such as an elderly relative. 

If you’re single and bought your home alone, you might not need this cover. If you passed away, the mortgage provider would reclaim the property. They’d then sell it on. 

Do I have to take out life insurance through my mortgage provider?

What happens to my mortgage if I pass away?

If you pass away before you’ve paid off your mortgage, a few different things could happen. First, your loved ones would need to contact the mortgage provider and provide a death certificate. If you have term life insurance, the insurer would pay out a sum to your named beneficiary. 

If you don’t have term or whole of life insurance, your loved ones may have to pay off the debt in some other way. If they couldn’t afford to pay, they would have to sell the property. 

What do I need to get a first-time buyer’s life insurance quote?

If you’re ready to get a life insurance quote to cover your first property, you’ll need to provide the insurer with a few details. In many ways, the application process is like term life insurance. You’ll need to provide details about yourself such as the required policy term and your health.

But if you’re getting cover for your first home, you’ll need details about the mortgage. The insurer will want to know about the mortgage term (how many years before it’s paid off).

They also need to know about your mortgage interest rate. They might ask about your salary too. This information will help them calculate how many years you’ll need cover for. It also lets them see how much the debt will go down each year. All of which helps them to calculate your premium.

First-time buyer insurance isn’t the only cover to think about when buying your new property. You might also want to consider contents and building insurance. Income protection and serious illness insurance also payout in case you can’t work. That means you can keep making mortgage repayments while not earning. 

Last updated: 17 September 2024

*Vitality Claims and Benefits Report, 2024