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Mortgage life insurance

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Up to £200 Amazon gift card if you buy life insurance with MoneySuperMarket

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1Based on £100,000 worth of level term cover for a 30 year-old non-smoker with no pre-existing medical conditions over a 20-year period (April 2024).

2Gift Card value varies based on the first monthly premium of the policy and will be confirmed on the results page.

3Restrictions apply, see www.amazon.co.uk/gc-legal.

What is mortgage life insurance?

Mortgage life insurance refers to a policy designed to provide financial protection for your mortgage in the event of your death.

It’s most commonly associated with decreasing life insurance because the payout with this policy type is designed to decrease over time along with the value of a debt such as your mortgage.

28% of all life insurance inquiries with MoneySuperMarket are for decreasing term policies however other policy types such as level term cover can also be used to protect your mortgage and can provide for other expenses as well.

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*Data collected by MoneySuperMarket from 1st July – 30th Sept ‘23

Mortgage life insurance: What to consider

  • 1

    Do I need life insurance for a mortgage?

    While life insurance isn't mandatory when securing a mortgage, it's a worthwhile consideration for those:

    • With dependents relying on them

    • With a requirement set by the mortgage lender

    • Seeking peace of mind

    Read our guide do need life insurance for a mortgage

  • 2

    How much does mortgage life insurance cost?

    Life insurance with MoneySuperMarket starts from £4.02ii per month but the cost of cover for your mortgage will depend on several factors including:

    • Your age

    • Your occupation

    • Your general health

    • The duration of the policy term

    • The amount of protection needed for your property

  • 3

    How much cover do I need?

    When selecting mortgage life insurance, it's important to consider an amount of coverage that adequately:

    • Safeguards your mortgage ensuring the payout is enough to cover it

    • Provides for your dependents if that is your intention

    To help you decide the level of cover you need, try our life insurance calculator

What are the main types of cover?

MoneySuperMarket offers two main types of life cover that can cover your mortgage.

Decreasing term

Decreasing term life insurance policies have a pay-out that decreases over time, ending when the pay-out reaches zero. People often use these policies to cover their mortgage and decrease them to match the rate at which they pay off the loan.

A Chart depicting decreasing term insurance with a line showing premiums declining with length of policy

Advantages

  • Usually more cost-effective than other policies

  • Aligns with specific debts such as your mortgage

Disadvantages

  • A decreasing payout may leave beneficiaries without cover for other financial needs

  • Cover is aligned with your mortgage so less flexibilility for changing financial goals

Level term

Level term policies have a fixed pay-out that stays the same for the whole policy. No matter when during the policy you pass away, your beneficiaries will always receive the full amount.

Chart showing amount of cover as a flat line over time

Advantages

  • You know how much your policy will pay out

  • Can cover your mortgage as well as your beneficiaries

Disadvantages

  • More expensive which could be a consideration for those with tighter budgets

  • Potential for over-insuring if financial needs decrease over time

Add policy options or compare alternative policy types

You can add extra cover to your policy, this can be in addition to covering your mortgage debt

Kara Gammell

Our expert says

The amount of life insurance you’ll need depends on your circumstances and what you want to achieve. A good starting point is to think about how much cash you’d need to clear any debts that you might leave behind when you die.  For most people, the biggest debt to consider is your mortgage. You should also work out how much money your dependents might need to feel financially secure if you’re no longer around to provide an income.

- Kara Gammell, Life and Health insurance expert

Why compare mortgage life cover with MoneySuperMarket

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    Save money

    Easily compare mortgage life insurance options to find the best value for your budget, and save on premiums.

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    Quotes matched to you

    We give you tailored life insurance quotes ensuring policies match your specific needs and preferences.

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    Defaqto star rated policies

    We provide independent Defaqto star ratings on policies to help you decide on the right quality product for you

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.

The gift card is redeemable within 40 days of the 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 life insurance purchased after the 1st of May 2022. One voucher per person.

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

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Get tailored life insurance quotes with MoneySuperMarket

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Prefer 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 8 am to 8 pm

  • Saturday 9 am to 2 pm

  • Sunday 10 am to 3:30 pm

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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.

Whenever you make a change to your mortgage or your personal circumstances change, it is important to review your policy to ensure it still suits your needs.

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. 

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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.