Mortgage Protection Insurance

Mortgage protection insurance is a term life-insurance product designed specifically to clear an outstanding mortgage if the policyholder dies during the mortgage term. It is sometimes called decreasing term assurance because the sum assured falls in step with the mortgage balance over the years; some products use level rather than decreasing cover.

The policy is taken out by the borrower, often at the same time as the mortgage and frequently sold by the lender's mortgage adviser. Premiums are typically £10 to £40 per month for a young, healthy borrower on a £200,000 mortgage; older or higher-risk borrowers pay more. The policy is usually written either assigned to the lender (the lender is the legal owner of the policy proceeds and the payout discharges the mortgage automatically) or written in trust to a named beneficiary — see policy in trust for the trust mechanics — typically the surviving partner, who can use the proceeds to clear the mortgage but is not legally required to.

Mortgage protection insurance differs from a general life insurance policy in scope. A general life policy pays a defined sum on death whatever the family decides to do with it; mortgage protection insurance is purpose-built to clear a specific debt. Where both exist, the mortgage policy clears the mortgage and the general life policy provides resources for everything else.

It is also distinct from Payment Protection Insurance (PPI), which covers monthly mortgage repayments during illness or unemployment but does not pay out on death. PPI was widely mis-sold in the 1990s and 2000s; the current FCA-regulated version of the product is much narrower.

After a death, the executor's first call to the mortgage lender should establish whether any mortgage protection or general life cover is in place against the loan. The lender's records show the existence of any policy assigned to them. Where no policy is assigned, the executor checks the deceased's bank statements for premium payments to insurers and contacts each insurer directly with the death certificate.

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Last verified: 30 April 2026 against published industry guidance from major UK lenders and insurers.