Mortgage life insurance is a form of insurance specifically designed to protect a repayment mortgage. If the policyholder were to die while the mortgage life insurance was in place, the policy would pay out a capital sum that will be just sufficient to repay the outstanding mortgage, allowing any joint mortgage holders or dependants to remain in the property. With this type of insurance, the amount of cover reduces roughly in line with the way a repayment mortgage decreases.
Please note companies are ranked in no particular order and data comes from each company’s website and was last updated in March 2023.
Topics
1. Barclays
- One of the largest, most reputable banks in the UK
- Mortgage Life Insurance starts from just £6 per month
- Flexible payment terms offered
- 20 minute promise from getting a quote to getting your policy
- Useful online resources available such as the cover calculator tool
- Handy online jargon buster guide
- A large range of related service offerings including Banking, Borrowing and Investment Services, Mortgage Policies and Home and Travel Services
- Also offers general life insurance and critical illness life insurance
Website: Barclays
Read the full Barclays mortgage life insurance review.
2. Zurich
- A global insurance company covering 170 countries worldwide
- Competitive monthly premiums from £5 per month
- Fixed interest rates from 2% to 18% per year
- 5 Star Defaqto Rating
- Good online customer reviews
- Decent online resources and supporting information available
- A large range of related insurance products available including car, home, boat and travel insurance
- Also savings, investments, ISAs and pensions
- Free £100 gift voucher for new customers
- Also offers general life insurance and critical illness life insurance
Website: Zurich
Read the full Zurich mortgage life insurance review.
3. Legal & General
- A popular, trusted brand, founded in 1836
- One of the UK’s largest providers of life insurance
- 5 Star Defaqto rated
- 2020 Moneyfacts award winner
- A large range of individual life assurance products to choose from
- Competitive premiums from £6 per month
- Helpful online life insurance calculator
- A well informed website with decent FAQs and supporting information
- Free £100 M&S or Amazon gift card for new customers
- Also offers general life insurance, over 50s, critical illness and income protection life insurance
Website: Legal & General
Read the full Legal & General mortgage life insurance review.
4. LV
- A long established, trusted brand since 1843
- Excellent customer feedback
- Winner of the Moneywise Most Trusted Life Insurance provider seven years running
- Competitive cover from £5 per month
- Single life or joint life cover available
- Free access to LV Doctor Services
- A helpful, informative website
- Also offers general life insurance, critical illness and income protection life insurance
Website: LV
Read the full LV mortgage life insurance review.
5. Nationwide Building Society
- A trusted popular brand
- The largest building society in the world
- 15% discount on life insurance for members
- Premiums from £6 per month
- A large range of related financial services offered
- Well informed website
- Decent online FAQs and supporting information
- 30 day cool down period
- Also offers general life insurance, critical illness and income protection life insurance
Website: Nationwide
Read the full Nationwide mortgage life insurance review.
6. NFU Mutual
- A trusted brand name within rural communities and businesses
- Owned and run by its 900,000 members
- Partnered with AIG to provide cover
- Comprehensive levels of life cover offered
- Single and Joint Life policies available
- Also offers general life insurance, critical illness, income protection and whole life insurance
Website: NFU Mutual
Read the full NFU Mutual mortgage life insurance review.
7. NPA
- A long established business since 1921
- A representative voice of the pharmacy sector to government and regulatory bodies
- Products are specialist for the pharmacy sector
- Terms and decreasing cover options available
- Also offers general life insurance, critical illness and income protection life insurance
Website: NPA
Read the full NPA mortgage life insurance review.
8. Post Office
- A trusted and well-respected brand, owned by UK Government Investments
- Voted Best Online Life Insurance Provider 2019 by YourMoney.com
- Life insurance policy is provided by The Royal London Mutual Insurance Society Limited
- Available for those aged 18-70
- Rate is capped at 7% with a maximum pay out of £500,000
- A large range of financial and related services offered
- An informative website with useful links, FAQs and an online Life Insurance Calculator
- Free £50 Argos, M&S or Amazon Gift Card for new customers
- Also offers general life insurance, over 50s and critical illness life insurance
Website: Post Office
Read the full Post Office mortgage life insurance review.
9. Royal London
- A popular, well established and respected brand
- The UK’s largest mutual life and pensions company
- 2020 Platinum Trusted Service award winner
- Some excellent online reviews from happy customers
- Premiums from £7 per month
- Available for those aged 18-70
- Rate is capped at 7% with a maximum pay out of £500,000
- A large range of insurance, pension, investment, retirement and funeral products offered
- A helpful website with decent access to FAQs and online resources
- Also offers general life insurance, over 50s, critical illness, income protection and whole life insurance
Website: Royal London
Read the full Royal London mortgage life insurance review.
10. Sainsbury’s Bank
- A trusted British brand
- Britain’s longest standing Supermarket Bank
- Good customer feedback and reviews
- A quick, simple online process
- Most life insurance products offered
- Related services include loans, savings, insurance, travel money and credit cards
- Also offers general life insurance, over 50s, critical illness and whole life insurance
Website: Sainsbury’s Bank
Read the full Sainsbury’s Bank mortgage life insurance review.
11. TSB
- A large, well-known brand
- Partnered with Legal & General to provide protection products
- Competitive premiums from £6 per month
- Available for those aged 18-74
- Terminal Illness Cover and Accidental Death Benefit included for free with some policies
- A large range of related financial services including various bank accounts, savings, loans, mortgages and insurance products
- Also offers general life insurance and critical illness life insurance
Website: TSB
Read the full TSB mortgage life insurance review.
12. Vitality
- A popular, family brand
- Excellent reviews and great customer feedback
- A large range of cover options to choose from
- Cover from £9.75 per month
- Up to 40% off life insurance premiums for the first year
- A helpful, informative website
- Useful online resources and supporting documents
- 5 Star Defaqto Rating
- Also offers general life insurance, critical illness, income protection and whole life insurance
Website: Vitality
Read the full Vitality mortgage life insurance review.
What is mortgage life insurance?
Mortgage life insurance is a form of insurance specifically designed to protect a repayment mortgage. If the policyholder were to die while the mortgage life insurance was in place, the policy would pay out a capital sum that will be just sufficient to repay the outstanding mortgage, allowing any joint mortgage holders or dependants to remain in the property.
It could pay out a cash sum if you die or you’re diagnosed with a terminal illness with a life expectancy of less than 12 months, during the length of your policy. With this type of insurance, the amount of cover reduces roughly in line with the way a repayment mortgage decreases. Once you or your dependants have made a claim, the policy ends.
If you pay into the plan and never need to make a claim (which would be the case if you pay off your mortgage before you die), you will not get anything back at the end of the term.
How much does mortgage life insurance cost?
Depending on your circumstances – your lifestyle, earnings, whether you have a family – protection insurance can provide an income should you become unable to work through accident or illness. The cost of life insurance to cover your mortgage depends on a number of factors, including:
1). Your age – as you get older the risk of falling ill increases, so your premiums will go up too, which is why it’s better to take out cover when you’re young.
2). Your occupation – certain occupations carry a higher risk, so you might face higher premiums if you work as a commercial driver, as a pilot, from heights or in an industry involving explosives.
3). Your general health – adding critical illness cover to your life insurance will increase your premiums, as there are more risk factors that could lead to a claim.
4). Your lifestyle – if you’ve smoked in the year before you take out cover, you’ll also likely pay more – on average people who had used nicotine in the last 12 months paid over £5 a month more than those who hadn’t.
What does mortgage life insurance cover?
Mortgage life insurance is typically bought to cover a mortgage, so in the event of your death your loved ones can pay off your outstanding mortgage. This will leave your house owned outright and allow your beneficiaries, perhaps a partner and children, to continue living in the property without having to worry about monthly mortgage repayments.
The amount you are covered for decreases over the term of your policy, similar to the way a repayment mortgage decreases. Indeed, one of the biggest downsides of mortgage life insurance is the declining payout. Even though your premiums stay the same, the payout amount keeps decreasing as you pay your mortgage off. And that premium often is much higher than what you’d pay for term life insurance.
What is the difference between mortgage protection and life insurance?
The main difference between mortgage life insurance and life insurance is that mortgage life insurance is tied to your mortgage loan. It will run for as long as the mortgage does and the payout will align with the outstanding mortgage balance. Mortgage life insurance may be a good option to consider if you have a mortgage, you want to leave your home to beneficiaries if you were to pass away, and your beneficiaries would struggle to afford the mortgage on their own.
Life insurance that’s not tied to your mortgage, however, may be more useful for family protection purposes, such as ensuring your loved ones can maintain their standard of living were you to die, that any school or university fees are covered and that your family is generally financially secure. One of the biggest benefits of mortgage life insurance is its convenience. There often is no life insurance medical exam required to buy a policy.
Is life insurance compulsory when taking out a mortgage?
No, you don’t need to have life insurance to repay your mortgage if you were to pass away. You can get a mortgage loan without it. However, you should think carefully about what might happen were you to die during the life of the loan. Do you have a partner or children who you might want to stay in the house if you were no longer around? If so, could your partner afford to keep up with the mortgage repayments themselves?
If not, mortgage life insurance, which will step in to pay off the outstanding mortgage balance were you to die before repaying the loan, may be a good consideration. This type of insurance may not be necessary if you don’t have any dependants, or anyone else living in your home, as no-one else will need to continue making the mortgage repayments.