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Do parents need life insurance for their mortgage?

Legally you don’t need to take out life insurance alongside your mortgage. However, as a parent, it could be an important step in financially protecting your family. 

Life insurance pays out a lump sum if you pass away during the policy term. The pay out can allow your family to pay off the mortgage and remain in their home. 

It’s hard to think about a world where you’re not there for your children, but getting a life insurance policy means you can provide stability when they need it most. 

Comparing quotes through The Insurance Expert allows parents to get multiple mortgage life insurance quotes at once. 

The Insurance Expert is owned by Reassured, an award-winning broker, who will conduct the comparison service.

The service is fee-free and quotes start from just 20p a day†, so why not get in touch today?

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Mortgages in the UK

  • In the UK, 29% of people own their home with a mortgage[1]
  • As of 2025, UK mortgage debt was at a record high standing at £1,647.3 billion. This means the average household owes around £155,263 on their mortgage
  • At the end of 2024, roughly 92,170 mortgages were in arrears by at least 2.5% of the outstanding balance (this would mean that these borrowers had fallen behind on payments)[2]
  • It’s estimated that 36% of UK mortgage holders have no life insurance, income protection or critical illness cover in place[3]

What is mortgage life insurance?

Mortgage life insurance is a policy that’s designed to help your family pay off the mortgage if you pass away during the policy term. 

Most commonly this is a decreasing term life insurance policy as with this option the cover amount will reduce throughout the policy term, usually at the same rate as a repayment mortgage. 

However other options are available to meet the needs of those with different types of mortgage.

Depending on the amount of cover you choose it could allow your loved ones to pay the mortgage off in full or help them keep up with monthly mortgage payments over a long period until they find their feet. 

How does mortgage life insurance work?

Mortgage life insurance works by providing cover for a set term. If you pass away during this time, the policy pays out and your loved ones can use the funds to help pay off the mortgage. 

Exactly how mortgage life insurance will work will depend on the type of policy you take out to protect your mortgage. 

As decreasing term life insurance is often the most common option, let’s look at how this would work: 

  1. You’ll apply for a policy. This involves talking through your needs, deciding on a policy type and agreeing how much cover you’ll take out. When using life insurance to protect your mortgage you can choose to align your policy term with your mortgage term and your cover amount with your remaining mortgage balance. You’ll also answer an application questionnaire so that insurers can understand your eligibility and how much you’ll pay if they offer you a policy. 
     
  2. Once a policy is in place, you’ll need to keep up with your monthly premium payments to keep your cover valid. If you stop paying your premiums, your cover will also stop. Throughout the policy term your cover amount will reduce, typically in line with your mortgage balance. 
     
  3. If you pass away during the policy term, your loved ones can make a claim on the policy and receive a pay out. They can use the money to pay off the mortgage in full or to keep up with monthly mortgage repayments (depending on how much cover you took out). 
     
  4. If you don’t pass away during the policy term, the policy will simply expire and no payment will be made. 

Why is mortgage life insurance important for UK parents?

Mortgage life insurance is an important consideration for UK parents to help their loved ones stay in the family home should the worst happen. 

Going from a dual-income family to a single income family could leave your loved ones needing to make changes to their lifestyle to fit a new budget - which could cause more stress and upset while they’re already grieving.   

If you’re not around to support your family, it could become hard for them to keep up with monthly mortgage payments on the family home which could result in them falling into arears, needing to sell and downsize or move in with family. 

A pay out from mortgage life insurance provides vital financial support allowing them to keep their home and maintain a sense of ‘normal’ during an uncertain time. 

Compare mortgage life insurance quotes through The Insurance Expert to find a great deal on a policy to protect your home.

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What cover amount should parents pick for mortgage life insurance to cover their remaining mortgage balance?

How much cover you take out will depend on how much of your mortgage is remaining. 

The aim of mortgage life insurance is to help protect your mortgage so the policy details typically reflect your mortgage details.

For example, if your mortgage is £200,000 over 25 years you could choose for your cover amount to be £200,000 with a policy term of 25 years. 

You could also choose to provide an additional sum in your cover amount to help with the costs of running a home, such as household bills and home maintenance. 

Mortgage life insurance calculator

Mortgage life insurance UK calculator

Enter your remaining mortgage balance plus any other costs you’d like to protect for your family to work out how much cover you’ll need.

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£137,934 is the estimated mortgage debt per household in the UK.

The purchase of a home is likely to be the largest financial commitment any of us will make in our lifetime. Your life insurance should cover your remaining mortgage balance to allow your loved ones to stay in the family home should anything happen to you.

Source: Moneynerd.co.uk
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The average monthly household budget in the UK is £2,548 (that’s £30,576 per year), which is spent on transport, food & drink, utilities (gas, electricity, water etc), clothing, council tax and leisure activities.

With energy prices hitting a record high and the cost of living rising sharply in the UK, you may wish to factor in utility bills and family living expenses into your cover.

Source: Nimblefins.co.uk
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The average personal debt of UK adults has risen to £34,566 (not including mortgage debt), with credit cards, personal loans and overdrafts being the most common forms of debt.

Factoring in any debts into your life insurance cover means that, if they need to be paid back from your estate after your passing, your loved ones won’t miss out financially.

Source: Money.co.uk
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According to SunLife, the average cost of a funeral in the UK is £3,953 (with the overall cost of dying at £9,200).

Funeral costs have increased by 116% since 2004 and are a significant cost which should be factored into the amount of life insurance you secure.

Source: SunLife.co.uk
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When factoring in cover for your children, you may wish to calculate the amount based on how long it is until they reach financial independence.

This could include childcare (£7,000 per year for part-time care), school expenses (£1,519 per school year for uniforms, lunches, stationary etc), as well as an additional sum for further education (this could be a contribution of up to £5,000 per year).

Sources: Daynurseries.co.uk, Primarytimes.co.uk & Savethestudent.org
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2 in 5 adults say they are relying on an inheritance to fund their retirement.

Factoring in an inheritance to your sum assured could allow loved ones to live a more financially comfortable life. Alternatively, you could leave a cash gift to a charity of your choosing.

Source: Moneyage.co.uk
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If you’re lucky enough to have your own savings or are part of the 30% of UK residents who already have a life insurance policy in place, this can provide financial protection for loved ones.

By entering your current cover, savings or death in service amount you can reduce the sum assured you require.

Source: Scottishbusinessnews.net
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What is the best type of mortgage life insurance for parents?

Decreasing term life insurance is the most common form of mortgage life insurance.

This is because the cover amount reduces throughout the policy term, usually at the same rate as a repayment mortgage.

Decreasing term life insurance

  • Cover for a set term 
  • Pay out reduces throughout policy term 
  • Ideal for helping to pay off a repayment mortgage 
  • Usually the cheapest form of life insurance 
  • Prices start from 20p per day¥ 

However, just because this is the most common option doesn’t mean it’s the right option for you. 

For example, if you have an interest only mortgage, having a cover amount that reduces probably wouldn’t leave enough money at the end of the mortgage for the final lump sum to be paid. 

In this case, level term life insurance could be a more suitable option. 

Level term life insurance

  • Cover for a set term 
  • Pay out stays the same throughout the policy term 
  • Ideal for helping to pay off an interest only mortgage 
  • Could allow you to cover other costs for your family 
  • Prices start from 20p a day

Alternatively, if your family would find it hard to budget a lump sum, family income benefit could allow them to keep up with monthly mortgage payments. 

Family income benefit

  • Cover for a set term
  • Pays out monthly to mimic an income (payments will be made for the remainder of the policy term)
  • Ideal for helping to cover monthly mortgage payments 
  • Prices start from 20p a day¤

Ultimately, it’s down to the personal circumstances of you and your family as to what will be the best option to protect your mortgage. 

Comparing the various options available can help to ensure that you’re getting the right policy for your needs at a good price. 

How much does life insurance typically cost for parents?

The cost of life insurance for parents will depend on a variety of factors. 

During the application process you’ll need to answer a life insurance questionnaire. The answers you provide will help insurers calculate how much you’ll pay for your policy. 

The questionnaire will require details such as: 

  • Age 
  • Health 
  • Lifestyle 
  • Occupation 
  • BMI 
  • Smoking status 
  • Policy type 
  • Policy term 
  • Cover amount 

The factors listed above help insurers to assess the level of risk you pose. Essentially the riskier they perceive you to be, the more you’ll pay for a policy. 

If insurers see you as being ‘higher risk’ it means that they believe a claim is more likely. This could be due to having a pre-existing medical condition, a dangerous job or hobby or being a smoker. 

Policy details such as how much cover you take out and how long you want cover for can also impact how much you pay, so it’s important to only take out what you need to avoid overpaying for cover. 

The table below shows example quotes for a non-smoker, in good health, for a decreasing term life insurance policy. 

As the hypothetical policy is to help cover a mortgage, the quotes are based on a decreasing term life insurance policy. The cover amount used is £273,000 as this was the average house price in 2025[4] with a policy term of 30 years as research suggests this is becoming a more common mortgage term[5].

Age

Price per month

25

£6.66

30

£8.14

35

£11.22

40

£17.32

45

£27.25

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Are there any other protection options parents should consider for a mortgage?

Life insurance isn’t the only protection policy that can help to protect your mortgage. 

As the policy pays out upon your death, you could also consider policies that pay out during your working life so that you can keep up with payments if you can’t work due to illness. 

Popular options for this include: 

  • Income protection - income protection pays out a percentage of your income while you’re unable to work due to illness or injury. It pays out on a monthly basis to help you keep up with your financial commitments and living costs.
  • Critical illness cover - critical illness cover can be added to a life insurance policy for an additional cost in your monthly premium. With this added you can make an early claim on your policy if you’re diagnosed with a specific serious illness. 

Top tips for parents who want to protect their mortgage

  • Don’t feel pressured into taking out cover through your mortgage lender – some mortgage lenders may offer life cover or have a provider that they partner with. While they may ask you if you’d like to take out cover this way, you don’t have to say yes. It’s completely possible to carry out your own research and go with an alternative provider. 
     
  • Only take out what you need – how much cover you take out and how long your policy lasts for can impact the price you pay, so it’s important to only take out a cover amount and policy term that meets your needs to avoid overpaying for cover. 
     
  • Lead a healthy lifestyle – reducing your alcohol intake (if you’re regularly consuming over 14 units per week), stopping smoking and maintaining a healthy weight could help you to achieve your cheapest premiums. 
     
  • Write your policy in trust – if your policy isn’t written in trust, your pay out will join your estate, meaning it could be liable for inheritance tax (which is currently charged at 40% on anything above the threshold of £325,000). Writing your policy in trust, helps to remove the pay out from your estate to minimise or avoid inheritance tax on the pay out. This means your loved ones can use more of the pay out to help cover mortgage costs. 
     
  • Look into what additional benefits a policy is offering – many life insurance policies come with additional benefits that could help you get the most out of your policy. This could be free health and wellbeing services, terminal illness cover or guaranteed insurability. Shop around to find the policy with the additional benefits that suit you and your family. 

Where can parents compare mortgage life insurance quotes?

We understand that it can be hard for parents to find the time to compare different insurers while juggling childcare. 

Comparing quotes through The Insurance Expert means that the hard work is done for you as you’ll receive multiple options at once. 

It’s a fee-free service that can help you find a great deal on your life insurance. 

Whether you want protection just for your mortgage, or you want to protect other costs for your loved ones too, a friendly team member can present you with suitable options. 

Simply get in touch today.

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Other frequently asked questions about mortgage life insurance for parents

Is it better for parents to get decreasing mortgage life insurance or level term life insurance to protect their mortgage?

Whether decreasing term life insurance is better to protect your mortgage than level term life insurance will depend on your personal circumstances. 

If you have a repayment mortgage, decreasing term life insurance is the most common option to protect this as your cover amount will reduce over the policy term. 

Whereas if you have an interest only mortgage, level term life insurance could be better suited as the cover amount doesn’t change over time. 

Can parents with pre-existing health conditions get mortgage life insurance?

It could be possible to get life insurance with a pre-existing condition depending on your personal circumstances. 

During the application process insurers will ask questions about your condition, such as when you were diagnosed and how it affects your daily life. 

Generally, if your symptoms don’t impact you on a daily basis and are mild and well managed, it may not affect your policy. However, if your condition is severe and impacts your daily life, it could cause higher premiums or refusal of your application. 

Should parents consider a joint life insurance policy to protect their mortgage?

Joint life insurance protects two lives under once policy, such as a couple.

If you and your partner share the mortgage you could take out a joint policy as a way of protecting each other from a worst-case scenario.

As both lives are covered under one policy, there’s only one premium to pay – helping you to save money on a policy. 

If one partner passes away, the policy will pay out to the surviving partner to help them pay off the mortgage.

It’s important to consider that joint life insurance will only pay out once, so if you have children you could consider two single policies to provide two potential pay outs. 

One upon the first death to help pay off the mortgage and then another upon the second death to help your loved ones with living costs. 

Can I make changes to my mortgage life insurance policy if my circumstances change?

Yes, it could be possible to make changes to your policy if your circumstances change.

Many policies include what’s known as ‘guaranteed insurability option’. This allows you to make changes to your policy, such as increasing your cover amount, to meet a specific change in circumstances (for example, you grow your family or move to a bigger home) 

With this option you won’t need to give any new medication information when making changes, your premium price will simply change based on the new policy information. 

It’s important to check your policy details to see if this option is included. If it’s not included your insurer may have different terms and conditions for making changes. 

Sources:

[1] https://www.nimblefins.co.uk/number-homeowners-and-renters-uk

[2] https://www.houz.co.uk/uk-mortgages-2025-statistics-trends-key-data/

[3] https://hoa.org.uk/news/no-financial-safety-net/

[4] https://www.gov.uk/government/news/uk-house-price-index-for-august-2025

[5] https://www.ukfinance.org.uk/news-and-insight/press-release/half-new-first-time-buyer-mortgages-have-terms-over-30-years-quarter

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