During the term of the mortgage, you pay a premium to build up capital in a life insurance policy. A part of this premium may also be used to insure a payout in the event of death. The premium is determined by the insurer and depends on the target capital at the end date of the insurance and, if applicable, the level of the insured amount in the event of earlier death. Depending on the capital built up at the end date of the policy, you can repay your mortgage in full or in part. This means you may be left with a remaining debt.
"}},{"title":"2. Tax rules in relation to interest and the life insurance policy","richBody":{"value":"Using the payout from the life insurance policy. If the accumulated capital is insufficient, you must repay the remaining debt with your own funds (savings). If this is not possible, it may be possible to extend the mortgage or take out a new mortgage. This is only possible if you have sufficient (retirement) income and is subject to the policy in place at that time. If that is not possible either, you will have to sell your home. It is therefore important to check in time whether you will be able to repay your Life mortgage at the end date and whether you need to take action now.
"}}]},{"componentType":"sectionTitle","title":"Advantages of a Life mortgage at a glance"},{"componentType":"accordion","accordionList":[{"title":"1. If you meet the tax rules, you will receive a tax benefit","richBody":{"value":"If you meet all tax rules, you may qualify for mortgage interest relief in box 1. If your capital insurance meets the tax conditions, your Kapitaalverzekering Eigen Woning (KEW) falls under box 1 for tax purposes. This means you do not need to declare the accumulated value of the policy as an asset in box 3 during the term. Your capital insurance must meet the conditions throughout the entire policy period. You can find all conditions at www.belastingdienst.nl.
"}},{"title":"2. Depending on the policy conditions, a payout is made on the maturity date or in the event of earlier death","richBody":{"value":"Depending on the policy terms, the insurance may either pay out on death before the end date or pay a capital sum if the insured person is still alive on the end date. If the policy provides both types of cover, the mortgage can be repaid (in part) using the payout if:
You build up capital in your life insurance policy by paying premiums. The way you build capital depends on the type of policy and the policy terms. For most life insurance policies, the premium is invested in investment funds. There are also life insurance policies that include a guaranteed capital amount, sometimes combined with a variable profit share. Check your policy terms to understand how capital is built up in your specific policy.
If (part of) your premium is invested, the final capital depends on investment returns. Depending on your risk appetite and the remaining term, you may choose a more risky or less risky investment profile. Through your insurer, you can adjust your risk profile and the investment funds. This allows you to influence the level of risk you take. Depending on the funds offered by the insurer, you can choose different investment categories (equities, bonds and property).
"}}]},{"componentType":"sectionTitle","title":"Disadvantages of a Life mortgage at a glance"},{"componentType":"accordion","accordionList":[{"title":"1. When the capital at the maturity date depends on investment performance, the final capital amount is uncertain","richBody":{"value":"If you invest, the final capital is not guaranteed. The final amount may be higher or lower than the target for your ING Life mortgage. If investment returns are disappointing, you may not be able to repay the full mortgage at the end of the term. You may then be left with a remaining debt.
Note: if the remaining term of your life insurance policy is short, it may be sensible to choose a less risky investment approach because you have less time to recover from negative investment results.
Your insurer will periodically inform you about the value development of your policy. Keep a close eye on this information. It will help you assess whether you will be able to repay your mortgage in full at the end date of your life insurance policy.
"}},{"title":"2. The costs of the life insurance policy may affect the net return that can be achieved","richBody":{"value":"For a life insurance policy, you pay a premium monthly, annually or as a one‑off lump sum. If you paid a lump sum, this is called a single premium. Your premium depends on the choices you make for your life insurance policy. For example, it depends on the target capital, the term, the level of the death benefit (and any other cover) and the policy costs. Check the policy terms for more details. Your insurer informs you about the value development, which gives you an indication of your net return and the capital payout at the end date. It is important to regularly review this value development and compare it to the level of your premium. This gives you an indication of the added value of your life insurance.
"}},{"title":"3. Because there are no monthly repayments, your loan amount remains the same. This affects your loan to value ratio, and that has consequences for the interest rate you pay on all your loan parts","richBody":{"value":"When determining the loan to value ratio of your mortgage, we take the total mortgage debt into account. Because you don't make monthly repayments with a Life mortgage, your debt remains at the same level. Your mortgage interest rate is partly determined by your loan to value ratio. Do you have a mortgage with NHG? In that case, the loan to value ratio does not affect your mortgage interest rate, as you already benefit from the lowest possible rate. See more information about your loan to value ratio here.
"}}]},{"componentType":"sectionTitle"},{"componentType":"accordion"},{"componentType":"sectionTitle","title":"Exchange ideas?"},{"componentType":"paragraph","richBody":{"value":"Want to discuss whether this mortgage type still suits your situation? And what the alternatives are? We are happy to help.
"}},{"componentType":"cta","textLink":{"url":"https://www.ing.nl/particulier/hypotheek/contact/fh?subscrid=cmnl-mort-fh","text":"Get in touch"}}]},"legalZone":{"flexComponents":[{"componentType":"sectionTitle","title":"Good to know"},{"componentType":"paragraph","richBody":{"value":"The English text of the website is a translation of the Dutch original version. This translation is intended for the customers convenience only. In case of any discrepancies between the two versions, the original Dutch version shall prevail. The mortgage offer and contract will be signed in Dutch. Also, all further communication after signing the mortgage contract will be in Dutch. You acknowledge and accept this. If any assistance or clarification is needed, we recommend contacting your mortgage advisor or to call our customer service via the ING app.
"}}]}}}