Personal Insurance

Understanding mortgage protection life insurance

April 23, 2024
Information published was correct at the time of writing

A pivotal role in securing the financial future of your loved ones

Mortgage protection life insurance provides peace of your mind for your family by paying off any outstanding mortgage on your home when you die, often referred to as ‘decreasing life cover’. It’s not the nicest thought, but if something were to happen to you, would your family or partner be able to afford the mortgage payments? With mortgage protection life insurance, you can take these worries away.

This insurance plays a pivotal role in securing the financial future of your loved ones by covering mortgage or other long-term loan obligations in the event of your demise during the policy term. The duration of the cover is a critical aspect in determining the extent and period of protection provided.


The principle behind mortgage protection life insurance is straightforward yet effective. As you gradually pay off your repayment mortgage (also called ‘capital and repayment mortgage’), the outstanding amount decreases, which in turn reduces your need for extensive life cover. Consequently, the mortgage protection life insurance cover reduces over time, mirroring the reduced mortgage balance.

Premiums are typically fixed, offering consistency in payments throughout the term. The cover reduces to zero alongside the mortgage balance, aiming for both to conclude simultaneously. This unique feature often results in lower premiums compared to other life insurance variants, although it’s important to note that failure to maintain premium payments can lead to the termination of the cover without any cash value or payout.


Although life insurance isn’t mandated by law alongside a mortgage, certain lenders may require it. Your specific needs and circumstances should inform the choice between different types of life insurance. Understanding what’s covered is crucial when deliberating on mortgage protection.


Securing a mortgage signifies a significant milestone, offering a moment to evaluate your existing protection measures for your loved ones. Mortgage protection life insurance ensures peace of mind, allowing you to relish life’s moments today, secure in the knowledge that your family will be safeguarded in the future. The type of cover you select will affect your family’s ability to use the claim proceeds to clear the remaining mortgage, address other long-term financial obligations or cater to their needs.

Opting for decreasing cover aligns the benefit with the reduced loan balance, ideally suited for repayment of mortgages or long-term loans. Conversely, level cover means that your family receive a oneoff lump sum to use however they like. This amount could not only help them keep the living standards they’re used to but also help pay off an interest-only mortgage.

Don’t forget, our professional friendly advisors are on hand to support you and can help you explore all of your options.

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