What Is Mortgage Protection Insurance?

Mortgage protection insurance protects your mortgage payments through three main policies: life insurance (pays off mortgage if you die), critical illness cover (clears mortgage if seriously ill), and income protection (covers payments if you can't work). It's not legally required but strongly recommended for homeowners with dependents or limited savings.

Learn more about life insurance in our detailed guide.

Learn more about income protection in our detailed guide.

What is mortgage protection insurance?

Mortgage protection insurance is a general term for policies that protect your mortgage payments. This typically includes life insurance to pay off the mortgage if you die, critical illness to clear it if seriously ill, and income protection to cover payments if you can't work.

Do I need mortgage protection insurance?

While not legally required, mortgage protection is strongly recommended - especially if you have dependents, are the main earner, or would struggle to pay the mortgage during illness. Lenders may require life insurance for some mortgages.

What types of mortgage protection are there?

The main types are: decreasing term life insurance (payout reduces with mortgage), level term life insurance (fixed payout), critical illness cover (pays lump sum if seriously ill), and income protection (replaces monthly income).

How much does mortgage protection cost?

Costs vary based on age, health, cover amount, and type. Decreasing life cover for a £200,000 mortgage might cost £8-15/month. Adding critical illness roughly doubles the cost. Income protection is separate and typically £20-50/month.

Should I get decreasing or level life insurance?

Decreasing cover matches a repayment mortgage (payout reduces as you pay off the debt). Level cover provides a fixed payout regardless of remaining mortgage - useful if you want to leave extra for family or have an interest-only mortgage.

Is mortgage protection the same as life insurance?

Life insurance is one component of mortgage protection. Mortgage protection can also include critical illness cover and income protection. Some people use 'mortgage protection' to mean decreasing term life insurance specifically.

Quick Answer

How Does Mortgage Protection Insurance Work?

Last reviewed: December 2025

Reviewed by Jay Sabine – CeMAP Qualified – 29 years experience

Mortgage protection covers your mortgage via life insurance (pays on death), critical illness (pays on serious illness), and income protection (replaces income). Not legally required but strongly recommended.

When you take out a mortgage, you're committing to potentially 25-35 years of payments. Mortgage protection insurance ensures these payments are covered if you die, become seriously ill, or can't work due to illness or injury. It protects both your family and your home.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Key Points

1Life insurance: pays off mortgage on death
2Critical illness: clears mortgage if seriously ill
3Income protection: covers monthly payments
4Decreasing cover matches repayment mortgages
5Not legally required but strongly advised
6Costs from £8/month for basic life cover

Eligibility Criteria

Must be taking out or have a mortgage
Health declaration required
Cover amount matches mortgage (or more)
Term should match mortgage term
Some conditions may affect premiums

Typical Timeframe

Policies can be arranged within 1-2 weeks. It's best to have cover in place before completing your mortgage purchase.

Next Steps

1Calculate mortgage balance and term
2Decide which protection types you need
3Consider decreasing vs level cover
4Get quotes from multiple providers
5Speak to a protection adviser

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Related Questions

Life insurance

Critical illness insurance

Income protection

Is critical illness worth it?

For more detailed information about this topic, visit our comprehensive guide:

Protection

Jay Sabine

CeMAP Qualified

29 Years Experience

Content reviewed: January 2026

Types of Mortgage Protection

Life Insurance

Pays off your mortgage if you die during the term.

Decreasing: Payout reduces with mortgage
Level: Fixed payout throughout
Cost: From £8/month

Critical Illness

Pays off mortgage if diagnosed with serious illness.

Covers: Cancer, heart attack, stroke
Payout: Tax-free lump sum
Cost: 2x life insurance approx

Income Protection

Replaces income to cover mortgage payments monthly.

Covers: Any illness/injury
Payout: Monthly until recovery
Cost: From £20/month

Example Costs

Example for 35-year-old non-smoker, £250,000 mortgage, 25-year term

Cover Type	Monthly Cost	What It Covers
Decreasing Life Only	£10-15	Death
Level Life Only	£15-25	Death
Life + Critical Illness	£35-55	Death or serious illness
Income Protection	£25-40	Monthly income replacement

Actual costs depend on health, occupation, and lifestyle factors