Mortgage Protection Insurance
Your mortgage is likely your biggest financial commitment. Protecting it means protecting your family’s stability, whether that’s through life cover, income protection, or a tailored combination of both.
At Need Financial Planning, we believe in educating and empowering people to build financial resilience, so your family can keep their home no matter what life throws at you. This isn’t a tick-box exercise. It’s about real life, real security.
Quick Takeaways:
Decreasing life insurance is the standard, but it only covers one risk.
You’re more likely to need income protection during your mortgage term.
Critical illness cover and family income benefit add extra security.
The best package is personal: tailored to your mortgage, family, and finances.
Friendly, expert mortgage advice backed by our happy clients.
What is Mortgage Protection Insurance?
Mortgage protection insurance is designed to ensure your mortgage payments are covered if the unexpected happens.
Most commonly, this means a decreasing life insurance policy that pays out enough to clear your mortgage if you pass away during the term. The payout decreases over time, in line with your reducing mortgage balance.
But there’s more to consider. You’re statistically more likely to experience an illness or injury that stops you from working than to pass away during your mortgage term. That’s where income protection and other forms of cover come in.
The Core Types of Mortgage Protection
1. Decreasing Term Life Insurance
Pays off the outstanding mortgage if you die during the policy term.
Cover amount reduces as your mortgage reduces.
Generally the cheapest form of mortgage protection.
Provides peace of mind for your family home.
2. Income Protection
Replaces part of your monthly income if illness or injury prevents you from working.
Ensures you can continue paying your mortgage and other bills.
Flexible: you choose how long it pays out and after what deferment period (i.e. when it starts paying out).
Often overlooked, but hugely valuable — especially if you’re self-employed or your household relies on one main income.
3. Critical Illness Cover
Pays out a lump sum if you’re diagnosed with a serious illness (as defined within your policy) such as cancer, heart attack, or stroke.
Can be set up to pay off your mortgage or provide a financial buffer for treatment, recovery, or adapting your lifestyle.
4. Family Income Benefit
Instead of a lump sum, this pays out a regular income to your family if you pass away.
Provides ongoing financial support, making it easier for your family to cover the mortgage and/or household expenses.
Why a One-Size-Fits-All Approach Doesn’t Work
Some people are focused on protecting their partner and children if they were to pass away. Others worry more about losing their income and not being able to meet the next mortgage payment.
The right protection package will depend on your:
Mortgage type and term
Family structure and dependants
Employment status (employed, self-employed, contractor)
Existing savings or other safety nets
Budget and financial priorities
Building Financial Resilience
Working with a protection expert can help you craft a tailored plan. For many clients, that means:
Life cover to clear the mortgage if the worst happens.
Income protection to keep up with payments if you can’t work.
Critical illness cover or family income benefit for added stability.
This layered approach ensures you’re not just protected in one scenario, but resilient against several.
Do I have to have mortgage protection?
No, mortgage protection isn’t a legal requirement in the UK. However, some lenders may ask about it, and many strongly recommend it. Even if your lender doesn’t insist, protecting your mortgage is about peace of mind, making sure you and your family can stay in your home if something unexpected happens. It's better to have it and not need it, than to need it and not have it.
What’s the difference between mortgage protection and life insurance?
Mortgage protection is usually a decreasing life insurance policy designed to cover just the mortgage. Life insurance can cover more than that, like leaving extra funds for your family.
Do I really need income protection if I already have life cover?
Yes, because you’re far more likely to be unable to work due to illness or injury than to pass away during your mortgage term. Life cover protects your family if the worst happens. Income protection protects you and your home if your income stops.
Can I mix different types of protection?
Absolutely. Many people combine life cover with income protection, or add critical illness cover. The right mix depends on your budget, family circumstances, and priorities.
Is mortgage protection expensive?
Not necessarily. Decreasing life insurance is usually very affordable. Income protection costs more but provides broader cover. A tailored package can often be designed within your budget.
Do I need life insurance to get a mortgage?
Most lenders don’t require life insurance as a condition for your mortgage. But think about what would happen if you passed away during the mortgage term. Without life cover, your family could struggle to keep up repayments. Life insurance isn’t mandatory, but it’s a smart way to safeguard your home and loved ones.
Need a Hand?
Working out what you can afford isn’t just numbers — it’s peace of mind.
Book a quick intro call and we’ll help you:
Understand your affordability range.
Compare what different lenders might offer.
Plan a realistic budget for your new home.
Ready to explore your options?
Prefer to email first? No problem!
Submit your enquiry here →
Need a Hand?
Honest, stress-free guidance can make all the difference! We’ll help you:
Understand your risks and priorities.
Compare cover options from trusted insurers.
Build a package that’s affordable and effective.
Ready to get started?
Prefer to email first? No problem!
Submit your enquiry here →
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THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
IMPORTANT: With investments, your capital is at risk. Pensions and investments can go down in value as well as up, so you could get back less than you invest.
Need Financial Planning Ltd is registered in England and Wales no. 10901658. Registered office, 123 High Street, Broadstairs, Kent, CT10 1NQ. Authorised and regulated by the Financial Conduct Authority. Need Financial Planning Ltd is entered on the Financial Services Register https://register.fca.org.uk/ under reference 977136. If you wish to register a complaint, please write to [email protected] or telephone 01843 228800. A summary of our internal complaints handling procedures for the reasonable and prompt handling of complaints is available on request and if you cannot settle your complaint with us, you may be entitled to refer it to the Financial Ombudsman Service at www.financial-ombudsman.org.uk or by contacting them on 0800 0234 567.
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