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Mortgage Life Insurance

Compare life insurance policies to cover your mortgage 

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Compare mortgage life insurance from 12 leading UK providers

We do the hard work for you, comparing deals from leading providers in the UK including: 

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Gift Card value varies based on the first monthly premium of policy and will be confirmed on the results page.

Receive a gift card when you buy life insurance

Take out life insurance online through MoneySuperMarket and receive an Amazon.co.uk Gift Card** worth up to £200.

Gift card is redeemable within 40 days of 6th life insurance payment. Gift Card value varies based on the first monthly premium of policy and will be confirmed on the results page. Terms and conditions apply. Not available to those who’ve received a voucher with a life insurance purchased after 28th of February 2021. One voucher per person, offer ends 5th December 2022.

**Restrictions apply, see www.amazon.co.uk/gc-legal

Image of Amazon gift card above a table which shows the card amount you will recive according to the policy amount

Why compare life insurance with MoneySuperMarket?

  • Tailored to you

    We work with many of the UK’s leading insurance providers to ensure your insurance policy matches your needs at the most competitive prices

  • Get covered immediately

    It’s simple, once you filter through the range of deals we find for you, our ‘buy now’ option allows you to check-out and get covered immediately without any medical exams or additional documentation 

  • Reassurance for your family

    MoneySuperMarket has helped more than 200,000 families find deals on life insurance over the past four years*

*MoneySuperMarket enquires 1 May 2018 – 30 April 2022

What is mortgage life insurance?

Mortgage life insurance is essentially a life insurance cover that helps to pay off your mortgage if you die before fully paying off your property. It is commonly bought as decreasing term life insurance policy. This means that as you pay off your mortgage, your insurance pay-out decreases. Its sole purpose is to pay off the residual amount left off your mortgage debt when you pass away therefore, it pays out less the further into your policy you get.

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What are the advantages and disadvantages of mortgage life insurance?

  • Tick

    Advantages

    • Secure protection for your investment 

    • Prevents your beneficiaries from using the life insurance pay-out for other means

    • Cheaper option than level term insurance 

  • Cross

    Disadvantages

    • Cover is only limited to the mortgage

    • The cover ends when the mortgage ends

    • Risk of lost premiums and starting a new life insurance policy 

Do I need life insurance for a mortgage?

It is not a legal requirement to get life insurance for a mortgage, however, you may consider a policy for the following reasons:

  • Lender requirements (part of mortgage application)

     Some lenders may require you to take out a life insurance policy before they finalise your loan  - this will be dependent of various factors including your credit score and the individual lender

  • To support any dependents

    If you were to pass away without completing your mortgage repayments your debt may fall on to your next of kin or your lender will be able to resell the property. Mortgage life insurance ensures that your debt will be fully paid off

How does mortgage life insurance work?

Mortgage life insurance, otherwise known as decreasing term life insurance, covers debts that increase over time including your mortgage. The way this works is, your life insurance pay-out will usually follow the trend of your mortgage.   Whether it is at the beginning or end of your policy, the amount still pending on your mortgage when you die, is the amount your life insurance will pay-out, hence why the payout will decrease as you pay off your mortgage. 

decreasing term life insurance

Types of mortgage life insurance policy

There are two different policy types of consider either a joint policy with your partner or a single policy for each of you individually. 

  • Joint policy

    Normally cheaper as it pays out when one of the policy holders dies so that the rest of the mortgage is paid off

  • Single policy

    This policy pays out separately if the policy holder dies as long as the policy is active

You can read more about the pros and cons of single vs joint life insurance here.

How much does mortgage life insurance cost?

The cost of your life insurance to cover your mortgage will depend on a number of factors including:

  • 1

    Your age

    As you get older you are more prone to falling ill which means you are a bigger risk to insurance providers – this is why it is better to take out cover when you are young

  • 2

    Your occupation

    Certain occupations carry a higher risk which means you’ll have higher premiums if you work in a sector that pose a threat to your health

  • 3

    Your lifestyle

    Lifestyle factors including whether you are a smoker may affect your premiums

  • 4

    Your general health

    You need to notify insurers of any health issues you or your immediate family have so provider can properly assess you

  • 5

    Cover term

    Try to ensure that the term of your insurance policy is the same or similar to the remaining term of your mortgage. Arranging your insurance for a short period could affect the pay-out value

Neal Cross

Our expert says

"

If you're getting a mortgage, the chances are you'll be asked to take out a life insurance policy before it's all finalised, which is something you should seriously consider. Your lender may have an insurer in mind, but you're not obliged to use them. In fact, it pays to shop around for the best insurance deal - you may well save a few extra quid.

"

- Neal Cross, Life Insurance Expert

Compare mortgage life insurance with MoneySuperMarket

Our comparison service makes it quick and easy to find a great life insurance policy for you.

  • Tell us about yourself

    We just need a few details about you, your medical history, and the level of protection you want for your family.

  • We browse the market

    We’ll browse the market for deals from leading UK insurance providers to find the cover you require at our lowest possible price.

  • Choose the deal you want

    Choose the policy for you and click through to complete the provider’s application process.

Need to speak to someone about life insurance?

We’ve partnered with LifeSearch to give people even more guidance when buying life insurance. If you’d like some help deciding what kind of cover you need, talk to LifeSearch free of charge. Give them a call on 0800 197 3178.

Opening hours are:

  • Monday to Friday 8am to 8pm

  • Saturday 9am to 2pm

  • Sunday 10am to 3:30pm

Lifesearch logo - phone on 0800 197 3178

In most cases if you’re over 18 and a UK resident you should be eligible, but some insurers may also have an upper age limit.

Your mortgage provider may offer decreasing term life insurance as part of your mortgage deal, but you should always shop around for quotes to ensure you get cover for the best price.

It shouldn’t, but you should check the interest rate on your mortgage doesn’t become higher than the rate applied to your life insurance policy – you should remember to adjust your cover amount if you make any changes to your mortgage terms.

You can generally put your life insurance policy in trust, so your beneficiaries don’t have to pay inheritance tax on the pay-out.

It can differ between insurers, but you should be able to make the following changes to your policy:

  • Change the length of the policy term

  • Change the amount of cover

  • Add or remove someone from the policy – you may be able to separate a joint life policy in the event of a divorce, the dissolution of a civil partnership or a new mortgage term

  • Switch between annual and monthly payments

Keep in mind that making changes to your policy can result in an increase or decrease to your premiums.

You should be able to cancel your life insurance policy, or as mentioned above remove yourself from a joint policy, but you should check if there is a cancellation fee involved. You won’t get the premiums you have already paid back.

No. If you live past the term of your insurance policy, the money is gone. You can buy what’s known as whole-of-life insurance or life assurance, which has no term and will pay out whenever you die, but it’s more expensive.

With general life insurance, your dependants can use the money for anything they like. Mortgage life insurance is used specifically to pay off the mortgage in your absence.

You can put your life insurance in trust, which is a way of legally avoiding inheritance tax on your life insurance pay out. 

You work hard to earn your money, and we don’t think you should waste a penny of it paying over the odds on your household bills. That’s why at MoneySuperMarket, we’re on a mission to save Britain money.

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So how do we make our money? In a nutshell, when you use us to buy something, we get a reward from the company you’re buying from.

You might be wondering if we work with all the companies in the market, or if our commercial relationships with our partners might make us feature one company above another. We’ve got nothing to hide, and we want to give you clear answers when it comes to questions like these, so we’ve pulled together everything you need to know on this page.

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