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Do I need life insurance for a mortgage?

Ask the Adviser – Molly Higgins

Whilst you won’t be legally obliged to obtain life insurance to cover a mortgage, some lenders prefer borrowers to have mortgage protection insurance in place as a precondition to lending. This means that if you were to pass away, the mortgage will be paid off immediately, leaving your loved ones with a roof over their heads and the mortgage lender cleared of their debt.

Given that a mortgage is the largest debt that most people will incur, mortgage protection makes sense.

Questions to ask yourself

The couple – If you are a couple, are you financially dependent upon each other? if either of you passed away, would the surviving partner be able to cover the monthly mortgage repayments? No? – You need to consider mortgage protection.

The family – Do you have a family who could potentially lose their home should you pass away? Yes? – You need to consider mortgage protection.

Single person – If you are single, who would benefit from the mortgage being paid off? If you have no dependents and the property would be sold in the event of your death, you might want to consider Critical illness cover or an income protection policy instead of life insurance. Do you have employee benefits or savings? How long would they last if you became too ill to work?

The landlord – Would you like the balance of the mortgage to be paid when you pass away so that you can leave the property to any dependents you may have? Yes? – You need to consider mortgage protection.

Types of Mortgage Protection available

A decreasing sum assured is sometimes chosen by people who want to cover the amount outstanding on a repayment mortgage. The sum assured decreases in line with the total amount owed, however, your premium will remain level. This is the cheapest type of life insurance to protect a capital and interest repayment mortgage.

Level term life insurance can be taken out to provide a lump sum to pay off a mortgage. Whilst the balance of a capital and interest mortgage reduces over time, the insurance policy remains level, which means that the difference between the two amounts will grow. This can then be used to provide additional family protection. We do, recommend that a separate life insurance policy is used for family protection.


If you have any questions about this or have any other protection enquiries, please call us and speak to one of our friendly Advisers who are always on hand to help – there is no such thing as a silly question!

Our advice comes at no obligation and with no hidden costs.  You don’t pay us directly but we get paid by the insurer if you decide to start a policy with them.

We are advisers, not salespeople. You and your family come first and are at the heart of any advice that we provide. We like to think that we are friendly, approachable and professional! But don’t take our word for it, have a look at what our clients say about us.

Next steps

Whilst you are welcome to get a quote online, we would recommend you speak to one of our advisers.

Any quote that your adviser provides you with will take into account your circumstances and medical history, as well as your budget!

An online quote is just that – a quote – it isn’t a definite offer of cover. What really matters is the premium you are offered, after your application has been assessed.

Call Freephone 0800 644 4468 – Monday to Thursday from 09.00 to 19.00 and on Friday between 09.00 and 17.00