What type of Life Insurance do I need to back an Interest Only Mortgage?

You need the standard form of Life Insurance which is technically called Level Term Life Insurance.

If you have an Interest Only Mortgage, the amount of money you owe to your mortgage lender remains constant. To provide a set and constant value of insurance cover you need the standard Life Insurance ideally, with Terminal Illness cover* (*Please note that most good Mortgage Life Insurance policies include Terminal Illness cover at no extra charge).

Terminal Illness cover means that if you are have a serious illness and a Doctor certifies that you are expected to die within 12 months of diagnosis, then your life policy pays out immediately.