- Home
- Life insurance
- Life insurance for a mortgage
Life insurance for mortgage protection, matched to the loan
Life insurance for a mortgage helps your family keep the home: it pays out if you pass away during the term.
It is not a legal requirement (MoneyHelper ↗), but MoneyHelper calls buying a house a really good time to look into life insurance (MoneyHelper ↗).
This guide explains which kind fits which mortgage.
Every claim here is our summary of a named external source, linked beside it. Sources change: check the wording at the link before you rely on it.
What is mortgage life insurance?
Mortgage life insurance is term life cover taken out to clear a home loan.
MoneyHelper says decreasing term cover reduces each year and is designed to be used with repayment mortgages, where the outstanding loan decreases over time (MoneyHelper ↗).
Legal & General describes its decreasing cover as falling roughly in line with the way a repayment mortgage decreases (Legal & General ↗).
One check matters.
For decreasing cover, Legal & General says to make sure the interest rate on your mortgage does not become higher than the rate applied to the policy, which is shown in your quote (Legal & General ↗).
Decreasing: falls with the loan
The cover reduces each year. MoneyHelper says it is designed to be used with repayment mortgages, where the outstanding loan decreases over time (MoneyHelper ↗).
The bars show the shape of the cover only. They are not to scale and carry no insurer's figures.
How much mortgage life insurance do you need?
Start with the balance left on the mortgage and the years left to run, then decide whether the family would need more than that.
MoneyHelper says the amount of cover you need depends on any debts, your mortgage or rent, the number of dependants and your income (MoneyHelper ↗).
Keep it matched.
Legal & General says a policy may not completely pay off the outstanding mortgage unless the cover is adjusted to match any new mortgage arrangements (Legal & General ↗).
Type your own figures. Nothing is filled in for you.
Types of mortgage life insurance
The mortgage decides the shape.
A repayment mortgage falls over time; an interest-only mortgage does not fall during the term, so decreasing cover would drop below the debt.
Some insurers let you add critical illness cover for an extra cost: Legal & General does, for example (Legal & General ↗).
How to buy mortgage life insurance
You do not have to buy from your lender.
MoneyHelper says most mortgage providers offer life insurance automatically when you take out a mortgage, but you might find a better deal elsewhere (MoneyHelper ↗).
Some insurers add extras around a house move: Legal & General, for its own policy, gives free life cover between exchange of contracts and completion (Legal & General ↗).
Name your beneficiaries or write the policy in trust.
If you don't, MoneyHelper says the proceeds are paid into your estate, which can take a long time and could mean Inheritance Tax (MoneyHelper ↗).
Timing
Look at cover when you buy
Have it in place by the time the mortgage completes.
Match
Match the term and the amount
To the loan left and the years left, and the mortgage type.
Compare
Get quotes beyond the lender
Insurers direct, brokers, comparison sites or an adviser.
Disclose
Answer the health questions fully
Insurers check your medical history when you claim.
Review
Recheck when you remortgage
A new loan or a new rate can leave the cover short.
Run a business? There is a business version
Businesses protect their loans too.
Legal & General lists the loan the business would need to repay if a key person passed away as one basis for sizing key person cover (Legal & General ↗).
This site is mainly about cover a company buys, and the cards show who each policy pays.
- Pays the business
Key person life insurance
Cover the company owns on someone it relies on, so the payout goes to the business (Legal & General ↗). It needs no trust (Royal London ↗).
Read the guide → - Pays the family
Relevant life insurance
Life cover the company pays for on a director or employee, paid to their family through a trust (Royal London ↗).
Read the guide → - The full set
Business protection insurance
Key person, shareholder protection, loan cover and the director policies, side by side.
Read the guide →
Check it for yourself
Every claim on this page is our summary of one of the documents listed here.
We last checked them against the live sources on 28 September 2026.
The documents are the authority, not this page.
Insurers and HMRC update them, so validate any figure or condition at its link before you rely on it.
- MoneyHelper: What is life insurance? ↗Types of cover, joint or single, cost factors, trusts, buying and cancelling
- MoneyHelper: What insurance do I need when buying a house? ↗Why buying a home is a good time to look at life insurance
- Legal & General: Life insurance ↗Its level and decreasing cover, eligibility and a published cover example
- Legal & General: Putting life insurance in trust ↗Trust types, pros and cons, and what happens after set-up
- Legal & General key person adviser guide ↗Key person cover sized to a loan the business would need to repay
- Legal & General key person insurance ↗Key person cover is owned by, and pays, the business
- Royal London relevant life FAQs ↗Relevant life: the employer pays, the family is paid through a trust
- Royal London business protection guide ↗Why key person cover needs no trust
Mortgage life insurance, answered
Not financial advice. This page is general information. Before buying insurance, the FCA tells consumers to check the firm on its Firm Checker (FCA ↗). For free guidance, see MoneyHelper.