What is mortgage protection life insurance?

The amount you have left to pay on your mortgage usually drops over time. If you have a smaller mortgage, you'll need less life cover, which means your mortgage protection life insurance will also decrease over time. 

With this type of cover, you pay the same amount in premiums each month for as long as your policy lasts. Your cover amount, which is how much your loved ones could get if they make a successful claim, gradually decreases. The idea is that your life cover and mortgage repayments end at the same time.

As a result, with decreasing life insurance, premiums are usually lower compared to other types of life cover. However, there are a few things to remember. If you have an interest only mortgage this type of life insurance might not be the most suitable. As the cover amount decreases over time, there may not be sufficient cover to help repay an interest only mortgage. Interest only mortgages generally require that the capital is repaid at the end. For this type of mortgage it might be more suitable to consider level term insurance, which pays a fixed cover amount if a claim is made during the policy term.

Typically, life insurance products such as these are not savings or investment plans - they only pay out on a successful claim. If premiums aren't paid the cover will end.

Whether choosing between level or decreasing cover for your mortgage insurance, you’re protected if you pass away during the term of your policy.

It's important to know what is and isn't covered, and this will vary in the insurance market. Our Life Insurance Plan offers the following options:

• Protection if you die – leave behind a lump sum if you pass away while you have the policy.
• Lump sum payment – you can choose up to £5 million worth of cover and get the full amount after a successful claim.
• Protection when buying a house – if you take out cover at the same time as buying a house, you’ll have up to 90 days of free life insurance during the house purchase process. 
• Terminal illness cover – you can get your lump sum early if you’re diagnosed with a terminal illness which meets our definition and you’re not expected to live longer than a year.
• Length of cover – you can choose the length of cover you need, from short-term to 50 years or until you’re 90 years old.
• Separation benefit – if you separate from your partner, some joint policies can be split into two single policies.

Aviva's Life Insurance Plan is not a savings or investment plan - it only pay out on a successful claim. If premiums aren't paid, the cover will end.

You don’t legally need life insurance if you get a mortgage, though some mortgage providers might recommend you take out a policy. A disadvantage of not having it, is that your outstanding mortgage debt will fall to your surviving loved ones or your estate in the event of your death. This could result in them being unable to keep the home. Without a life insurance payout, your loved ones might also struggle to cover other expenses such as funeral costs, other outstanding debts, or everyday living expenses, potentially having to take on new debt or dip into savings. Life insurance could help make a difficult time for your loved ones a bit easier. If you decide to take out life insurance, your mortgage adviser or a financial adviser could help you. If you don't have a financial adviser, you can find one at unbiased.co.uk. Please be aware that you may need to pay for this advice.

Getting a mortgage can be a big step in life and it could be an ideal time to stop and consider what protection you have in place. Life insurance could help give reassurance for the future. 

If you're considering taking out decreasing cover, this could help your loved ones pay off a repayment mortgage or a long-term loan. The lump sum you choose will decrease over time.

If you're thinking about level cover instead, this option pays out a one-off lump sum to your loved ones to use as they wish. It could help them keep the living standards they're used to, support them in paying off an interest-only mortgage, or could also go towards general living costs or monthly payments like rent.

What type of life insurance is right for you depends on your circumstances. You can find out more about the different types of life insurance here.

Mortgage protection life insurance is designed to cover your mortgage repayments and bills in the event of your death. It could ensure your loved ones can keep the house and also support them with paying the monthly bills. Life insurance cover can vary, so it's important to consider your needs and choose the right insurance provider and product for you.

Our Life Insurance Plan could provide that peace of mind you're looking for.

When you're buying a new home

You can get up to 90 days of free house purchase cover if you take out life insurance with us at the time you’re taking the plunge and snapping up a new home. Once we’ve accepted your life insurance application, your free cover starts after you’ve exchanged contracts, or missives are completed if you live in Scotland and lasts up until you complete — so long as you’ve given us a future start and end date that matches these.