If you’re buying a home or remortgaging, you’ve probably asked: Do I need life cover for a mortgage? The short answer is: it’s not legally required, but it’s often highly recommended, and in some cases, lenders may require it depending on your circumstances.
In this guide, we break down when you need life cover, why it’s important, and how to decide the right type of mortgage protection for your situation.
Is Life Cover Mandatory for a Mortgage?
In the UK, life cover is not a legal requirement when taking out a mortgage. You can complete a mortgage application and secure a home loan without purchasing a life insurance policy. However, some lenders may require it as a condition of the loan, especially if:
- You’re borrowing a high loan-to-value (LTV) percentage
- The mortgage is interest-only (where repayment depends on future funds)
- You have dependents and a joint mortgage
Even when it’s not required by the lender, having life cover or mortgage life insurance is often a smart financial decision because your mortgage doesn’t disappear if something happens to you.
Why Should You Consider Life Cover?
Your mortgage is likely your biggest financial commitment. Without life cover, if you pass away unexpectedly, your family could be left with the burden of repaying the loan or risk losing the home.
Here’s why life cover for your mortgage is a wise move:
1. Protect Your Family’s Home
Life cover ensures that your loved ones can stay in the home without worrying about repayments. A policy pays out a lump sum to clear the mortgage, giving your family stability when they need it most.
2. Affordable Peace of Mind
Many people overestimate the cost of life insurance. In reality, mortgage protection policies can start from just a few pounds per month, especially if you’re young and healthy.
3. Flexible Cover Options
You can tailor the coverage amount, term length, and policy type (e.g., level term or decreasing term) to match your mortgage and personal situation.
What Type of Life Cover Do You Need for a Mortgage?
The right policy depends on your mortgage type and goals. Here are the most common options:
Decreasing Term Life Insurance
This type of mortgage life insurance reduces over time, in line with your repayment mortgage balance. It’s usually the most cost-effective choice if your sole aim is to pay off your mortgage in the event of death.
Level Term Life Insurance
This policy pays a fixed lump sum regardless of when death occurs during the term. It’s suitable for interest-only mortgages or for people who want to leave additional money for their family.
Joint vs. Single Policies
Couples with joint mortgages can opt for joint life cover (pays out on the first death) or two single policies for more flexibility and double payout potential. Both options have pros and cons, so speak with an adviser. For more in-depth information, visit our Life Cover Insurance page
What Happens If I Don’t Have Life Cover?
If you don’t take out life cover:
- Your mortgage remains unpaid in the event of your death
- Your family or joint borrower may need to take over payments
- The lender could repossess the property if payments are missed
Life cover doesn’t just protect the loan; it protects the people you care about.
Can I Get Life Cover If I Already Have a Mortgage?
Absolutely. If you already own a home and didn’t take out life cover at the time, you can still apply for mortgage protection insurance at any stage. You can even combine it with critical illness cover for broader protection.
If you’re remortgaging, this is also the perfect time to review your existing protection and update it to reflect your current balance, income, or family needs.
Find the Right Cover for Your Mortgage
It’s easy to feel overwhelmed by choices, but you don’t have to decide alone. Our team of expert advisers can walk you through the best options based on your goals, budget, and mortgage type.
→ Find Mortgage Advisers to get personalised advice today.
If you’re a mortgage adviser helping clients understand protection options, you can Join our Mortgage network for access to tailored tools and lender resources.
Related Reading:
- What Is the Difference Between Life Insurance and General Insurance?
- Life Cover vs Mortgage Protection: Which One Do You Need?
- Decreasing Term Life Insurance
- Critical Illness Cover vs Income Protection
- Term Life Insurance
Do you need life cover for a mortgage? Technically, no. But if you want to secure your home, protect your family, and sleep better at night, the answer is likely yes. With the right mortgage cover, you’re not just ticking a box. You’re building financial security around what matters most: your home and the people in it.
Thank you for reading our “Do I Need Life Cover for a Mortgage? | Connect Mortgages” publication. Stay “Connect“-ed for more updates soon!
