[Warren]

...Please tell me what is that? I want to take a mortgage life insurance plan. Please tell me what is that?

[THOMAS T]

As a retired solicitor, I am familiar with the use of Insurance products in the context of security for mortgages. Your question is not clear, as you may not be, exactly what you are contemplating doing but I will assume you are buying a house or flat, with a mortgage. Unfortunately, as usual, the people who sell houses or flats are often also involved in the "sale" of a mortgage because there is a big commission paid for finding a "gullible victim" oh, sorry, "customer" who takes a particular product. Let me explain like this:-1) Some people buy using a "Repayment" mortgage. There is no insurance policy tied in. The Borrower repays the Mortgage by monthly instalments,paying back both a bit of the loan and a bit of the interest. This is usually the cheapest method. As there is no Life cover involved, if there is a family to consider then you would be sensible to have life cover ie if you die and your wife/partner/children can't pay the instalments. The cheapest cover (very cheap) is "Term" cover. This insures your life for a period of time (usually 10 years which is renewable at the end of the period)) for a low monthly premium to pay a fixed amount (usually the amount borrowed). There is no "Savings" component. It simply covers you if you die and will repay the amount insured for. It leaves a roof over your family's heads. You do NOT have to take this policy from your Mortgage Lender nor do you need to assign it to your Lender. It remains yours (and your Estate's if you die). The next cheapest cover is "Convertible Term" here you take a Term Policy which is "convertible". This means that you keep paying but one day you can decide to change it from pure "Term" to "Endowment" ie a saving type policy, still carrying death cover. This type of Policy is yours and isn't usually assigned ti the Lender, either. Insurers don't like this type of Policy because you get some of the value of your earlier payments when the risk was only death cover.2) There are then "Endowment" Policies. These used to be sold as "Low Cost" or "Low cost start-up". Here the policies have a savings and death element but they are assigned (signed over) to the Lender who also gets the commission for hanging this particular millstone, oops, sorry, savings plan. around your neck. Many people, most people, were mis-sold their policies in the 80s and 90s and the value of many (most) of these policies on completion of the mortgage ie 25/30 years won't pay off the capital/loan amount as they were expected to do. To explain, in an "Endowment-Linked Mortgage" the borrower only pays the interest on the loan and the premium of the Policy, receiving in return income tax relief at the basic rate. That is going to disappear (if it hasn't already done so!).It used to be a valuable way to mitigate tax when you got tax-relief at your highest rate of tax. If you can avoid the hard sell, there are usually much better savings deals than mortgage-linked Insurance products. Just look at the number of Mortgage Brokers who disappeared during the recession. If this has been suggested to you by the selling Agent don't go near it. If its because you haven't really got enough deposit, then you are being lured in. If you want to save, genuinely, talk to an Independent Financial Adviser (IFA). They must give you the best advice for you - not them!It is all as simple as that. It anyone tells you it isn't then they aren't telling you the truth.....which is all too often in the Insurance field.