Mortgage Protection
Making sure your family can stay in the home you've built together
Who this is for
- You've recently taken out a mortgage or remortgaged
- Your mortgage provider asked about life insurance but you didn't arrange cover
- You want to ensure your family could afford mortgage payments if you died
- You're concerned about what would happen to your home if the worst occurred
- You have existing cover but aren't sure if it's still adequate
What this cover helps with
Mortgage protection insurance is designed to pay out a lump sum if you die during the policy term. This money can be used to clear your mortgage entirely or provide ongoing support for payments.
Key outcomes:
- Your family can stay in the family home without financial stress
- Outstanding mortgage debt is cleared or substantially reduced
- Dependants avoid forced house sales during an already difficult time
- Peace of mind that your biggest financial commitment is covered
Common cover types and options
Decreasing Term Insurance
The cover amount reduces over time in line with a typical repayment mortgage. Usually the most cost-effective option if your mortgage balance is decreasing.
Level Term Insurance
The cover amount stays the same throughout the term. Useful for interest-only mortgages, or if you want extra funds beyond just clearing the mortgage.
Family Income Benefit
Pays out a regular tax-free income instead of a lump sum. Can help with ongoing mortgage payments and living costs rather than immediate debt clearance.
Joint Life Cover
Covers two people under one policy. Typically pays out on the first death only, but can be more affordable than two separate policies.
Pros and considerations
Benefits
- Ensures your family aren't forced to sell the home during bereavement
- Decreasing term cover is typically affordable and mirrors mortgage repayment
- Policies are usually straightforward and quick to arrange
- Cover can often be arranged without a medical exam for standard health
- Premiums are fixed for the entire term
Considerations
- Decreasing cover may not suit interest-only or part-repayment mortgages
- Joint policies typically only pay out once, leaving the survivor uninsured
- If you remortgage or extend the term, your cover may no longer match your needs
- The policy has no cash-in value and won't pay out if you outlive the term
- Health conditions or lifestyle factors can increase premiums or lead to exclusions
What affects cost and acceptance
Several factors influence both the price of your cover and whether insurers will accept your application:
Insurers and options
I compare leading UK life insurers available to advisers, based on price, underwriting approach, features, and claims reputation. Some insurers specialise in more complex health or occupation cases, while others offer very competitive rates for straightforward applications.
Important: Availability and suitability vary based on your individual circumstances, health, and requirements. I'll recommend what fits you best after understanding your specific situation.
Frequently asked questions
Is mortgage protection insurance a legal requirement?
No. While mortgage lenders will ask if you have life insurance in place, they cannot make it a condition of lending. However, it's worth considering how your family would manage the mortgage if you weren't around.
What's the difference between decreasing term and level term?
Decreasing term reduces in line with a typical repayment mortgage, making it more affordable. Level term keeps the same payout throughout, which suits interest-only mortgages or if you want funds beyond just clearing the debt.
Can I get cover if I have an interest-only mortgage?
Yes. Because your mortgage balance doesn't decrease, level term insurance is usually the most suitable option. The payout stays the same throughout the policy term.
What happens if I remortgage or move house?
Your life insurance policy typically stays in place. However, if you increase your mortgage or extend the term, your existing cover may no longer be adequate, so it's worth reviewing.
Should we get joint cover or separate policies?
Joint cover is usually cheaper upfront, but only pays out once. If you want both lives covered independently (so the survivor has ongoing protection), separate policies are better, though more expensive.
Will my mortgage lender know if I arrange cover?
Not automatically. The policy is yours, not the lender's. You can tell them you have cover in place, but you're not obliged to provide policy details.
What if I have health issues?
Many applicants with health conditions can still get cover, though premiums may be higher or certain conditions excluded. Some insurers are more flexible than others, which is where broker advice helps.
Can I cancel my policy if circumstances change?
Yes, you can cancel at any time. However, you won't get any money back, and if you want to restart cover later, premiums will likely be higher due to your increased age.
Let's make sure you're covered properly
I'll search the whole market, explain your options in plain English, and help you make an informed decision. No pressure, no jargon.
Please note: The information on this page is for general guidance only and does not constitute personal advice. Your individual circumstances, health, and requirements will determine what cover is suitable and available to you.
The Right Broker Ltd is an Appointed Representative of The Right Mortgage Ltd, which is authorised and regulated by the Financial Conduct Authority. (FCA number 715860).