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Mortgage protection

Life insurance structured around your home loan

Mortgage protection is life insurance sized to your home loan, so a surviving spouse or family keeps the house instead of being forced to sell. Most policies today also pay out if you're disabled or diagnosed with a critical illness — not only if you die — which matters, because losing your income to illness threatens the mortgage just as much.

It's usually term insurance with the term matched to your remaining loan. Some versions decrease as you pay the loan down; level policies keep the full benefit throughout and are often worth the small extra cost.

Who needs it

  • New homeowners within a few years of purchase
  • Families where one income covers the mortgage
  • Anyone without enough existing life insurance
  • Homeowners with a large or variable-rate loan
  • Couples where one spouse is the primary earner

Questions worth asking

  • Does this cover disability and critical illness, or only death?
  • Does the benefit decrease as I pay the loan down, or stay level?
  • Who receives the money — my family, or the lender directly?
  • Would a plain term policy for the same amount cost me less?

Worth knowing

The mistake people make: assuming the offer that arrived in the post after closing is the only option. Those letters are marketing, not a requirement, and the rates are often worse than a term policy you shop properly.

Mortgage Protection specialists in the Village

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Where the Village can write Mortgage Protection

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