What type of protection contract is best for a joint repayment mortgage?

For a joint repayment mortgage, decreasing term assurance is the most suitable form of protection contract. This type of assurance is designed to provide a lump sum benefit that decreases over time, coinciding with the repayment schedule of a capital and interest mortgage. As the mortgage balance reduces with each payment made, the level of cover provided by the decreasing term assurance policy also decreases, which aligns perfectly with the nature of a repayment mortgage.

This structure ensures that, in the event of a claim, the payout will correspond with the outstanding mortgage balance at that time, helping to cover the remaining debt. It provides the necessary financial protection for the policyholders’ dependents or beneficiaries, ensuring that the mortgage will be fully paid off if either of the joint mortgage holders passes away during the policy term.

Other options, such as level term assurance, provide a fixed payout, which may be more than necessary as the mortgage balance decreases. Whole life and universal life insurance are typically intended for long-term coverage and savings components, making them less applicable for the specific purpose of covering a declining mortgage debt. Thus, decreasing term assurance is the optimal choice for meeting the protection needs associated with a joint repayment mortgage.