Mortgage protection insurance

For most households the mortgage is the largest monthly bill and the largest debt. If one of the people paying it died, the payments would still be due. A partner on a single income, or relatives inheriting the home, might have to sell it or struggle to keep up.

Life insurance can pay a lump sum that clears or reduces the outstanding balance, so the people you leave behind can stay in the home without the mortgage payment hanging over them.

“Mortgage protection” is used for three different policies. Each one pays out on a different event, so the useful question is which of these you would struggle with.

• •Mortgage life insurance: pays a lump sum to clear or reduce the mortgage if you die during the term. This is what most people mean, and what the rest of this page covers.
• •Critical illness cover: pays a lump sum if you are diagnosed with a serious illness the policy lists, which can reduce or repay the mortgage while you recover. See critical illness cover for your mortgage.
• •Income protection: pays a monthly income if illness or injury stops you working, so the payments keep going. See paying your mortgage if you cannot work, which also explains how it differs from mortgage payment protection insurance (MPPI).

Couples often combine them: life cover for the full mortgage, with income protection for each earner. Our guide to combining life, critical illness and income protection shows how the pieces fit together.

Decreasing cover

The amount of cover reduces over the term, roughly in line with a repayment mortgage. Because the insurer's potential payout falls each year, it is usually the cheapest way to cover a repayment mortgage.

Decreasing policies reduce at an assumed interest rate set by the insurer. If your mortgage rate is higher than that assumption, your balance may fall more slowly than the cover. It is worth checking the rate the policy uses, and allowing some margin.

Level cover

The amount of cover stays the same for the whole term. It suits an interest-only mortgage, where the full loan is still owed at the end, and anyone who wants money left over after the mortgage is repaid, for example to support children. It costs more than decreasing cover for the same starting amount.

• •Repayment: the balance falls over the term, so decreasing cover is usually a good match.
• •Interest-only: the balance stays the same until the end, so level cover for the full loan is normally needed.
• •Part-and-part: some of the loan reduces and some does not. A combination of decreasing and level cover, or a single level policy, can be used.

Death-in-service benefit usually ends when you leave that employer, so it is worth checking whether you would want cover that stays with you.

The main factors are:

• •The outstanding mortgage balance and the remaining term
• •The type of mortgage, which decides between decreasing and level cover
• •Your age, health, smoking status and occupation, which the insurer uses to price the policy
• •Whether you also want money for your family beyond the mortgage
• •Whether you add critical illness cover, which increases the premium

What it costs: a guide

These are rounded figures from quotes we obtained in August and September 2026: the lowest guaranteed monthly premium across our panel for level life cover, single life, with guaranteed premiums, over 25 years, for a non-smoker. They are a guide to the shape of the cost, not a quote.

Decreasing cover for a repayment mortgage is usually cheaper than level cover for the same starting amount. Smoking, your health and adding critical illness cover all raise the price. For more ages and amounts, see how much life insurance costs, or work out the amount with our life insurance calculator.

We compare policy benefits and terms alongside price, because the cheapest policy is not always the one that suits you best.

The right shape of cover depends on how you are buying and who shares the home:

• •Joint mortgage life insurance: one joint policy or two separate ones, and why the difference is often small in price.
• •First-time buyers: what to arrange alongside your first mortgage.
• •Moving house and remortgaging: when existing cover stops matching the new loan.
• •Interest-only mortgages: why the cover usually needs to be level.
• •Gifting a deposit and buy-to-let: when the money at stake is not tied to the home you live in.
• •A new baby: when the mortgage stops being the biggest thing to protect.
• •Putting cover in trust: so a payout reaches the right people quickly.

Your life insurance does not change automatically when your mortgage does. After moving home, remortgaging, borrowing more or changing the term, check that the cover still matches what you owe and for how long.

Some policies let you increase cover when you move home or increase your mortgage without further medical questions, within limits set in the policy. If you need more cover, it can make sense to add a new policy alongside the existing one rather than replace it. Our guide to reviewing your existing protection explains what to look for.

Life insurance pays if you die during the policy term, subject to the policy terms. Many policies also include terminal illness benefit, which can pay out early if you are diagnosed with a terminal illness and meet the policy's definition.

It does not pay if you are seriously ill but not terminally ill, or if you cannot work. For those risks, look at critical illness cover for your mortgage and income protection for your mortgage or rent.