

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 – 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.
There are two main types of mortgage cover:
1. Decreasing term – where the payout reduces in line with your mortgage balance

This is the most common, and usually the cheapest, as the amount you're covered for decreases as you pay your mortgage off (though your monthly payments stay the same). This leaves your dependants with enough money to pay the rest of the mortgage.
It's therefore designed for repayment mortgages – the most common type where the amount you borrow is fully repaid at the end of the term.
This guide focuses on these policies, though it's always worth looking at level-term insurance too - if both policies aren't too different in price, level-term could be a better option as it provides more cover.
2. Level term – where the payout is fixed for the length of the policy

These policies tend to be more expensive, as they pay a defined lump sum if you die within a fixed time, for example, £200,000 if you pass within the next 18 years. However this could be better if you want to leave a lump sum for your dependants to cover more than just your mortgage, for example other debts and/or ongoing spending.
Level-term is also likely to be a better bet if you have an interest-only mortgage, as the lump sum would be available to cover the capital rather than just the repayments. See our Level Term Life Insurance guide for full information.
Should I get mortgage life insurance?

If anyone relies on your income to pay the mortgage and would struggle to keep up with payments without you around, a mortgage life insurance policy can be a cheap way to ensure they have a financial lifeline when you're gone.
Though, ultimately, you don't have to have life insurance so you'll need to weigh up whether the monthly cost is worth it for you. To help, here are two key points to consider:
- If you don't have dependants, you don't need life insurance.
You may not need to get a mortgage life insurance policy (or indeed any other sort of life insurance) if no one relies on your income to pay the mortgage, eg your partner and/or children. It would mean, however, that whoever inherits your property may need to sell it, unless they're in a position to pay off your mortgage, or get a mortgage on the property themselves.
- 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.
How to slash the cost of mortgage insurance quotes
Never blindly go with a policy offered to you by your mortgage provider. 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.
Instead, you should get quotes from a number of insurers. Yet unlike other insurance such as car or home, the cheapest prices are not on common comparison sites. In general, you'll find the cheapest quotes by going to a broker. Yet there are two ways to do this:

If you're not sure what kind of policy you need, or you have complicated medical conditions or other circumstances, it's worth getting advice on buying cover. Doing this means the advisor will take some commission, so it's not the very cheapest way to buy – though it should result in the most suitable policy.
To find a life insurance adviser, 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.

If you know what you're doing, you can go via a specialist discount broker. This is the very cheapest way to buy life insurance, but it does rely on you knowing what sort of policy you want to buy.
These brokers are cheapest as they rebate commission they get from the insurer to you as a discount. You may still pay a fee to use these brokers, but it's usually just £25 or so, and can save you £1,000s over the life of a policy compared with buying from a bank or direct from an insurer.
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.

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…
You can use free complaints tool Resolver. The tool helps you manage your complaint, and if the company doesn't play ball, it also helps you escalate your complaint to the free Financial Ombudsman Service.

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