Mortgage protection insurance explained
Mortgage protection insurance is not one product. It usually means life cover, which pays a lump sum if you die during the policy, critical illness cover, which pays a lump sum if you are diagnosed with a serious illness the policy lists, or income protection, which replaces part of your income if you cannot work through illness or injury. Check your mortgage offer for any cover the lender requires.
This page is information only. We do not sell, arrange or advise on insurance, and nothing you send us is passed to an insurer or adviser.
What mortgage protection is
The FCA calls these "pure protection" products. It says they are designed to help people and their dependents with existing financial commitments if the policyholder dies, becomes incapacitated, injured or infirm. A mortgage is one of those commitments. The descriptions below are the FCA's own.
| Type of cover | What it does (FCA description) |
|---|---|
| Term assurance (life cover) | Pays a lump sum to beneficiaries if the policyholder dies within a specified period. |
| Critical illness cover | Pays a lump sum to the policyholder if they are diagnosed with a prescribed (non-fatal) serious illness or medical condition. |
| Income protection insurance | Replaces part of a policyholder's regular income if they become unable to work due to illness, accident, or disability. |
Decreasing or level life cover
Life cover for a mortgage usually comes in two forms. With decreasing cover, the amount paid out goes down over the policy. Aviva, an insurer, says the cover "decreases each month like the outstanding balance of a mortgage" and that it "may also cost less" than other term life cover because the payout falls (Aviva). With level cover, Aviva says "your premium and cover amount remain the same throughout the policy term" (Aviva).
Some insurers use the name "mortgage protection insurance" for decreasing life cover only: Aviva says it "is a type of decreasing life insurance" (Aviva). Others, including this page, use it more widely. So when you see the name, check which type of cover the policy actually is. Decreasing cover is built around a repayment mortgage, where the balance falls. On an interest-only mortgage the balance does not fall, so it is worth asking whether decreasing cover fits. We do not recommend any insurer.
Cover if you lose your job
Life cover, critical illness cover and income protection do not pay out because you lose your job. There are short-term policies that can. The FCA describes payment protection insurance as cover that was "designed to cover your repayments for a time if you couldn't pay yourself", for example if you were made redundant, or could not work because of an accident, illness or disability. It says you "can still buy PPI, or other types of income or short-term protection insurance" (FCA, payment protection insurance).
The FCA treats "accident, sickness, and unemployment insurance" as a different product from income protection, with its own ways of being sold (FCA, MS24/1.2). The FCA says PPI "was often mis-sold to customers" (FCA), so read what any policy covers, how long it pays and what it leaves out before you buy.
Do you need it?
Start with your mortgage offer. It lists any insurance the lender makes a condition of the loan. Beyond that, the question is who would pay the mortgage if you died, became seriously ill or could not work. Think about your partner or family, any savings, any cover through your job, and what the mortgage costs each month.
The FCA's own research found that buying a home or taking out a new mortgage is one of the main reasons people buy this kind of cover (FCA consumer research, December 2025).
How it's sold: advised or non-advised
You can buy cover from an insurer directly or through a firm such as a mortgage broker, a financial adviser or a protection specialist. The sale can be advised, where the firm recommends a policy for you, or non-advised, where you are given information and choose yourself. The FCA says most of this cover is sold through firms rather than direct: in 2023, around 92% of income protection and 83% of critical illness premiums from new sales came through them, and around 89% and 85% through advised sales (FCA, MS24/1.2).
Whoever you buy from, check the firm is authorised on the FCA register. Our guide on how to find a mortgage broker shows how to check.
If you cannot pay your mortgage
Insurance is one way to plan for this. If you are already struggling, contact your lender early. If you get certain benefits, you may be able to get Support for Mortgage Interest. GOV.UK says it is paid as a loan, which you will need to repay with interest when you sell or transfer ownership of your home.
Common questions
What is mortgage protection insurance?
It is a name for insurance that helps pay your mortgage if something happens to you. It is not one product. It usually means life cover (a lump sum if you die during the policy), critical illness cover (a lump sum if you are diagnosed with a serious illness the policy lists) or income protection (part of your income if you cannot work through illness or injury).
Do I have to take out life insurance to get a mortgage?
Check your mortgage offer. It lists any insurance the lender makes a condition of the loan. If your offer does not require it, whether you take out cover is your decision.
What is the difference between advised and non-advised?
On an advised sale, the firm recommends a policy for your needs. On a non-advised sale, you get information and choose for yourself. The FCA says both ways are used, and that most new income protection and critical illness cover in 2023 was sold through advised channels.
Is income protection the same as cover for redundancy?
No. The FCA describes income protection as cover that replaces part of your income if you become unable to work due to illness, accident or disability. Losing your job is a different risk. Read what a policy covers before you buy it.
Is there insurance that pays my mortgage if I lose my job?
Some short-term policies cover your payments for a time if you lose your job, as well as for accident or sickness. The FCA treats these as a different product from income protection. Check what a policy pays, for how long, and what it leaves out, before you buy.
What is decreasing life cover?
Life cover where the amount paid out goes down over the policy, roughly in line with what you still owe on a repayment mortgage. Level cover pays the same amount whenever you die during the policy. Some insurers use the name mortgage protection for decreasing cover only.
What help is there if I cannot pay my mortgage?
Talk to your lender as early as you can. If you get certain benefits, you may be able to get Support for Mortgage Interest from the government. GOV.UK says it is paid as a loan, which you repay with interest when you sell or transfer ownership of your home.
See also how much can I borrow and the mortgage documents checklist.
Founder, MortgageExplained
Adam spent over eight years as a mortgage adviser at Just Mortgages, with further experience in commercial finance. He is CeMAP and CF qualified. He built MortgageExplained to do one thing well: explain mortgages in plain English, so you know where you stand before you speak to a regulated broker. Every page on the site is written by Adam.
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