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Mortgage life insurance

Save £100s on your cover

If you were to die before your mortgage is repaid, your loved ones may have to pick up the repayments, or be forced to sell the property to repay the lender. This guide takes you through what mortgage life insurance is, what to watch out for and how to buy a policy – as you don't need to take it from your mortgage lender.

Who's this guide for? Anyone looking for insurance to pay off their mortgage if they were to die (so the amount it'd pay out reduces over time). If you want life insurance that pays out a fixed lump sum, regardless of your mortgage payments, head to Life insurance.

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What is mortgage life insurance?

Mortgage life insurance – also referred to as mortgage protection or decreasing term insurance – is a type of insurance that pays out if you die before you finish paying your mortgage.

Its aim is to stop anyone you leave behind from worrying about paying the monthly repayments, or be forced to sell the property to repay the amount still owed.

This is designed to cover the balance on your mortgage if you were to die during the term, so the amount you're covered for decreases in line with your mortgage debt, though it is worth bearing in mind that if you take a mortgage payment holiday, the pay out amount may fall short of the mortgage balance. 

It's often cheaper than level term, however, if you want to leave a lump sum for your dependants to cover other debts and ongoing spending, a level-term life insurance policy is likely to be a better option (though you could always have both). See our level-term life insurance guide for full information. 

Alternative types of life cover

This guide focuses on mortgage life insurance, though before you go on, do check these four alternative types of cover to assess whether they'd suit you better. 

  • Level term – where the payout is fixed for the length of the policy

        Put simply, it's an insurance policy that pays out a set         sum if you were to die while it's in force. Its aim is to         provide financial support to those you leave behind, to         prevent the loss of your income from causing a money         crisis. 

        'Level term' is the simplest type of life insurance and the name tells you all you need to         know...

        Level: When you take out a policy, you determine how much you'd need it to pay out, eg         £200,000. This remains 'level' – meaning it's fixed at that amount – for the duration of the         policy.

        Term: You choose how many years you'd want the policy to cover you for, eg 25 years. You         usually can't remain covered past the age of 80, though this maximum age does vary by         provider. 

        The more cover you get and the longer the term you want, the more it costs. You pay via a         monthly premium which continues until the policy either pays out (if you were to die during         the term) or the term ends.

  • Family income benefit (FIB) – provides a regular income, rather than a lump sum

This provides an annual tax-free payment for the length of the policy term, eg £10,000/yr for 10 years. So if you died five years into the policy, your dependents would receive £10k for each of the remaining five years.

The amount it pays out therefore reduces over time, so policies tend to be cheaper than level term.

  • Over-50s' life insurance – guaranteed acceptance but it's much more expensive 

Insurers work out if they'll accept you and how much you'd pay based on a number of factors including your age and health. However, an over-50s' policy is an alternative which offers guaranteed acceptance up to age 80 or 85.

Yet to compensate these are much more expensive, you can't claim in the first one or two years and you could get back less than you pay in. For full information and warnings, see our Over-50s' life insurance guide.

  • Whole-of-life insurance – usually to cover inheritance tax

These are often (but not always) investment-linked life insurance policies mainly used to mitigate inheritance tax. In other words, the payout amount should cover the inheritance tax bill on death, and the policy runs out when you die, instead of after a fixed time. Due to this, these are usually an expensive option. 

Should I get mortgage life insurance?

This is something every parent, partner, or person with any other type of dependant needs to consider. If anyone relies on your income and would struggle without you around, a life-insurance policy can be a cheap way to ensure they have a financial lifeline when you're gone.

Ultimately, you don't need to have life insurance cover, though, so you'll need to weigh up whether the monthly cost is worth it for you. To help, here are some key points to consider:

  • If you don't have dependants, you don't need life insurance. 

    If there's no one you'd want the money to go to, don't bother. Equally, if you do have dependants but there would be little financial impact if you died, then you still might not need a policy. But if paying the bills, the mortgage, bringing up kids, food shopping and more would be a struggle, life insurance is a cheap way to solve that.

  • Check if you've any cover with your employer – though don't just rely on that. 

    If you're employed, you might benefit from free 'death-in-service' cover. This pays out a multiple of your salary, typically around four times, while you are an employee of that company.

    The death doesn't need to occur at work or be linked to your job, but it's not usually a good idea to rely on this cover as your only protection. If you were to change jobs or be made redundant, your next employer might not offer it. Plus, if you've had any significant health problems in the interim, you may find it expensive to arrange your own cover. If you do need life insurance, it's best to buy it sooner rather than later – it's more expensive the older you get. Even though the term will usually be longer, younger people normally have much cheaper premiums, so save more overall.

  • If you've already got a life insurance policy, it's likely you're already covered.

    You may not have 'mortgage insurance', but if you already have a level-term life insurance policy then this'll give your dependents a lump sum if you die. However, they'd want to use the insurance sum to pay off the mortgage, you'll need to ensure the amount you're covered for exceeds the amount you owe, and the policy is in force for as long as your mortgage term. 

Mortgage life insurance need-to-knows

If you think mortgage life insurance is right for you, here are our key need-to-knows to understand before opting for a new policy.

  • When you buy mortgage term cover you will be given two choices of monthly payment (premium) – guaranteed or reviewable.

    If your premiums are guaranteed, your insurer will never change the price, so you'll know what you'll be paying over the life of the policy. Reviewable premiums, on the other hand, often cost less at first, but your insurer can hike costs later on, meaning a cheap deal can potentially become costly as you age.

  • It's important you're open and honest with any information you provide, to ensure any policy that's set up for is fit for your needs – and will cover you if the worst were to happen and your dependants needed to make a claim. 

    Likely things you'll need to disclose when getting a quote for a policy include your age, whether you smoke, your occupation and your health history. The insurer then uses this information to determine whether it will cover you and a price. 

    If you're comparing quotes yourself via a discount broker, you'll usually answer a few basic questions to see initial prices, but will then have to disclose much more detailed information if you then go through to the insurer to apply, which could affect the price/the decision to insure you. 

    As each insurer has its own rules on pre-existing medical conditions, if you've a complicated medical history, it's worth getting advice before you buy. This is helpful as brokers tend to know which insurers will cover your condition(s), and at the best rates.

    If you're over 50, you can get a policy with guaranteed acceptance – but it's much more expensive 

    If you don't want to disclose health issues and are 50 or over, an over-50 policy is an alternative which doesn't require any health questions and there's guaranteed acceptance up to age 80 or 85. Yet to compensate these are much more expensive, you can't claim in the first one or two years and you could get back less than you pay in.

    For full information and warnings, see our Over-50s' life insurance guide.

  • Mortgage life insurance policies can either be taken out to cover just you – a single policy – or yourself and your partner – a joint policy.

    A joint policy is often cheaper, however, it only provides one payout, usually on the death of the first policyholder, when the cover then stops. This is usually best suited if your partner is your only dependant and you'd have no one else to leave a second payout to.

    However, if you had a joint policy and were to later split with your partner, you'd need a new single policy, and this could be more expensive as it would be based on your new age and health. 

    Taking out two single policies is usually more expensive, but here you would get two payouts if you were both to die during each policy term. Equally it covers you personally, so works independently to whether you are still together with your partner or not. 

  • If you die with an active mortgage life insurance policy, the payout forms part of your estate, which could mean it's hit with a huge whack of inheritance tax. Yet, in many cases it's possible to avoid this by writing the policy in trust, if it's done at the time the policy is taken out.

    If the policy is written in trust, the insurance pays out directly to your dependants, so it never becomes part of your estate, which avoids inheritance tax and often speeds up the payout.

    It's relatively easy to do as most insurance policies include the option (and papers) for writing in trust directly at no extra charge. Note that there are different types of trusts and they can be difficult to change or cancel, even if all your beneficiaries agree, so think carefully about who a payout would be going to.

    If you know what you're doing, you can write the policy in trust yourself. If not, seek advice from a top advisory broker or see our guide on independent financial advisers.

  • Life insurance usually gets more expensive with age, so savings aren't always possible. The fact you're older, or if you've had health conditions since you got the policy, can mean new policies are more expensive than the one you have. Yet there's no harm getting a quote, especially if any of the following applies: 

    • You took your policy direct from your mortgage lender (and your health is largely unchanged). If you took out a policy via your mortgage lender or without getting multiple quotes first, it's likely you could stand to save from switching policies. Plus, there's no harm in running some new quotes to check. If it shows you can save (make sure the cover is at the same level), all you need to do is set up the new cover. Once it's in force, cancel your existing policy.

      As MSE Eesha found: "I took out cover three years ago for £23 a month. I then decided to run some new quotes and found the SAME policy with the SAME provider for £9 a month. Over the 15 years that's left I'll save £2,520."

    • You've since quit smoking, or you no longer have a risky job. Non-smokers pay a lot less than smokers, because they're a lot less likely to die during the term. To count as a non-smoker, you need to have been genuinely nicotine-free for at least a year and in some cases up to five years, so always check.

      Therefore one year after you quit, get a new quote and see if you could save big. But don't be tempted to lie. If you die and it is discovered you had been a smoker, it could invalidate the policy. If you are seriously giving up, it's a good idea to get it noted on your medical records to back up any potential claim. 

    • You've remortgaged or changed properties and no longer need as much cover (and your health is largely unchanged). If you took out a policy to cover a £200,000 mortgage but have since moved, paid off a lump sum or remortgaged and you now owe much less than you were expecting, you could find a new policy covering the amount you now owe is cheaper yet still meets your needs (and your new cover will be for a shorter time period, which will help too).
  • Many things can happen during the lifespan of the policy, and while your broker or mortgage insurance company may be doing well now, it could be a different scenario 20 years down the line. Here's how you could be affected:

    • If your insurer went bust. If your provider goes bust, the Financial Services Compensation Scheme (FSCS) will try to find another insurer to take over your policy or issue a substitute one. Equally, if you've ongoing claims, or need to claim before a new insurer is found, the FSCS should ensure you're covered. 

    • If your broker went bust. The only payment you're likely to make to a broker will be the fee for arranging the policy, which is often no more than £25. 

      In the unlikely event your broker went bust after you paid it but before your insurance was arranged, the chance of you getting your money for the fee back is slim.

      The FSCS would be able to help with any premiums lost as a result of a broker going bust, as these payments are ring-fenced, but this is unlikely to extend to broker fees.

How to slash the cost of mortgage life insurance quotes

Getting a mortgage life or decreasing life policy offered to you by your mortgage provider can make a dent in your pocket during the term of your policy. These are often heavily inflated and you're under no obligation to take it – mortgage life cover is completely separate from your mortgage agreement and lender. So always remember... 

Never blindly go with a policy from your bank or direct from an insurer, as these are expensive ways to buy.

The rule of thumb is you should get quotes from a number of providers. Yet unlike other insurances – such as car or home, the cheapest prices are not usually on the standard comparison sites. In general, you'll find the cheapest quotes by going to a broker.

This table shows you how much prices can differ for the same level of cover, depending on where you buy the policy – some options can easily cost you almost twice as much:

How mortgage life insurance costs differ depending how you buy

Guaranteed prices over a 25-year term with £200,000 benefit (1)
Provider Monthly Total cost
Discount broker
(non-advised route)





Discount broker
(with advice)





Typical comparison site (2)





Typical direct bank (2)
£7.07 £2,121
Typical direct insurer (2)





Prices correct as of March 2023. (1) Prices based on 30-year-old non-smoker. (2) When you purchase online, with no advice

So, the cheapest way to buy mortgage life insurance is from a broker – but you need to decide whether you want advice on which policy to choose, as the cheapest policy may not always be  the 'best' one for you. So choose between these two options (the links will jump you to the top brokers in each section)...

  • Non-advised route – usually best if you know exactly what you want, you don't need the policies explaining and you want the absolute cheapest price.

  • Advised route – if you're not sure what kind of policy you need, or you have medical conditions, or you want to speak to an expert.

Cheapest 'non-advised' discount brokers – best if you know exactly which policy you want

If you know what you're doing, you can go via a specialist discount broker. This is the very cheapest way to buy mortgage life insurance, but it does rely on you knowing what sort of policy you want to buy. 

You can buy a policy through them (usually for a fee of £25) and they rebate all the commission they get from the insurer into your policy (so you basically get a discount hence the name discount broker). So, while the fee is a one-off £25, you can save £1,000s over the life of policy. 

We'd suggest checking at least the top two and add in the third if you've time, and remember – if you're not sure what you're doing or if a policy's suitable, it's likely better to get advice.

Important. If you do pick up the phone to speak to any of these companies before you buy, make sure you're clear on whether you're getting 'advice' or 'information' – ask the person you're speaking with.

If they're advising you, they need to do a full check on your financial and medical circumstances and insurance needs before suggesting policies to you. If they're just giving you information about policies or answering your questions, that's fine, but here you shouldn't be pressured in to taking one policy over another.

Struggling to find cover? 

British Insurance Brokers' Association.

If you're struggling to find cover and the firms above weren't able to help, or you'd rather find someone local to where you live, head to the British Insurance Brokers' Association website and use their 'Find insurance' search. Make sure to select 'Life insurance' when it asks what you'd like to insure. 

How to complain about your insurance provider

The insurance industry doesn't always have the best reputation for customer service. Plus, while a provider may be good for some, it can be hell for others.

Common problems include claims either not being paid out on time or at all, unfair charges, or exclusions being hidden in small print. It's always worth trying to call your provider first, but, if not, then…

Spotted out of date info/broken links? Email: