Mortgage Life Insurance Cover
Speak to Protection Advisor
or
Why Choose Ascot Mortgages
Why Choose Ascot Mortgages
What Our Clients Say About Us
Written by:
Richard Johnson
Ascot Protection Expert
Last Updated:
07.05.2025
Written by:
Richard Johnson
Ascot Protection Expert
Last Updated:
07.05.2025
Life Insurance: Protecting what matters most
When you’re planning for your financial future, life insurance is one of the most important considerations. It offers peace of mind that, should the worst happen, your loved ones won’t be left struggling financially. Whether you’re safeguarding a mortgage, protecting your family’s income, or ensuring business continuity, life protection insurance provides a vital financial safety net.
At Ascot Mortgages, we help you understand your options and find the right life cover to suit your individual needs.
What is Life Insurance?
Life insurance is a type of policy that pays out a lump sum to your beneficiaries if you pass away during the term of the policy. It’s designed to help ease the financial burden on your family or dependents by covering outstanding debts, mortgage payments, living expenses, or even funeral costs.
The amount paid out and the length of the policy can vary depending on the type of life insurance cover you choose.
What does Life Insurance protect?
Life insurance protects your loved ones from financial hardship in the event of your death. Common uses for the payout include:
- Paying off a mortgage or other large debts
- Replacing lost income for a surviving partner or family
- Covering childcare or education costs
- Covering funeral or end-of-life expenses
- Leaving a financial legacy
This kind of protection is especially crucial if you have financial dependents, a joint mortgage, or if you are the primary income earner in your household.
How does Life Insurance work?
You choose the policy type, cover amount, and policy length. You then pay a monthly premium to maintain the policy. If you pass away while the policy is active, your insurer pays out a lump sum to your nominated beneficiaries. There are two main types of life insurance cover:
- Level Term Life Insurance: Pays out a fixed amount if you die during the policy term
- Decreasing Term Life Insurance: The payout reduces over time, often aligned with a repayment mortgage, ideal for mortgage life insurance needs
What is mortgage Life Insurance?
Mortgage life insurance, also known as mortgage life assurance, is a specific type of cover designed to pay off your mortgage if you pass away before it’s fully repaid. It ensures your family won’t have to worry about losing their home during an already difficult time. There are two common types:
- Decreasing Term (repayment mortgages): The cover amount decreases as your mortgage balance reduces
- Level Term (interest-only mortgages): The payout remains constant, suitable when the outstanding mortgage doesn’t reduce over time
Single Life Insurance vs Joint Life Insurance
When buying life insurance, you can choose between:
- Single Life Policy: Covers one person and pays out on their death
- Joint Life Policy: Covers two people (usually a couple) and pays out on the first death, after which the policy ends
A joint life insurance policy is often more cost-effective but may not offer as much flexibility as two single policies.
How much Life Insurance cover do you need?
The amount of life insurance cover you need depends on several factors:
- Your current income and monthly expenses
- Outstanding debts (mortgage, loans, credit cards)
- Number of dependents and their future financial needs
- Education costs for children
- Whether you want to leave a financial legacy
A common rule of thumb is to aim for 10–15 times your annual income, but this can vary widely depending on your circumstances.
What’s the right policy length?
Your policy term should ideally match the length of your financial obligations:
- Until your mortgage is paid off
- Until children are financially independent
- Until you reach retirement age
Some people also opt for whole of life insurance, which guarantees a payout regardless of when you die, though premiums are typically higher.
What are the types of Life Insurance?
There are several types of life protection insurance to consider:
- Level Term Life Insurance
- Decreasing Term Life Insurance
- Whole of Life Insurance
- Family Income Benefit – Instead of a lump sum, this pays a regular income to your dependents for a set period
- Over 50’s Life Cover – No medical required, ideal for covering funeral costs or small debts
Benefits of Life Insurance
- Peace of mind – Knowing your family will be financially secure
- Affordability – Many policies start from as little as £5 per month
- Flexible cover – Tailor the amount and length to match your needs
- Support during grief – Helps with funeral expenses and financial responsibilities
Additional cover to consider
Beyond standard life insurance cover, you might also want to explore:
- Critical Illness Cover – Pays out if you’re diagnosed with a serious illness
- Income Protection Insurance – Replaces a portion of your income if you’re unable to work due to illness or injury
- Accident, Sickness & Unemployment Cover – Short-term protection for unexpected life events
Real-World Example
Let’s say a 35-year-old non-smoker takes out a mortgage life insurance policy for £200,000 over 25 years. Monthly premiums might be as low as £10–£15. If they pass away within the term, the full £200,000 is paid to their family, clearing the mortgage and preventing repossession of the home.
What impacts the cost of Life Insurance cover?
Amount of cover – The higher the payout amount you choose, the more your monthly premiums are likely to be. This is because the insurer takes on a greater financial risk with larger policy sums.
Policy length – Longer policy terms typically cost more, as there’s a greater chance of a claim being made during that time. Shorter terms may offer lower premiums but less long-term security.
Age – Life Insurance generally becomes more expensive as you get older. This is due to the increased health risks that come with age, which raise the likelihood of a payout.
Height and weight – Your body mass index (BMI) can affect the cost of cover. A BMI outside of the healthy range may lead to higher premiums due to associated health risks like heart disease or diabetes.
Medical history – Pre-existing conditions or a family history of serious illness can increase the cost of Life Insurance. Insurers use this information to assess your overall health risk.
Lifestyle – Factors such as smoking, alcohol use, or participation in high-risk activities (like extreme sports) may lead to higher premiums, as they can increase the likelihood of health issues or accidents.
Occupation – If your job involves high-risk environments such as working at heights, with heavy machinery, or in emergency services your premiums may be higher due to the increased risk of injury or death.
Mental health – Mental health history, including conditions like anxiety or depression, may be considered by insurers. The impact on your premium depends on the severity, treatment history, and how well the condition is managed.
Do you really need Life Insurance?
If you have financial responsibilities or dependents who rely on your income, the answer is almost always yes. Whether you’re buying a home, starting a family, or thinking about estate planning, life insurance gives you confidence in an uncertain future.
Placing Life Insurance in Trust
Placing your life insurance policy in trust is one of the most effective ways to ensure your loved ones are financially protected in the event of your death. When a policy is written in trust, you gain greater control over how the payout is managed and who receives it. This approach can help your beneficiaries receive the money more quickly and efficiently, as it typically avoids the delays and potential costs associated with probate. It can also help minimise inheritance tax liability, making sure more of the benefit goes directly to the people you intend to support.
Why choose Ascot Mortgages?
At Ascot Mortgages, we’re more than just a broker – we’re a trusted financial partner. With years of experience helping people find the right life insurance cover, we provide personalised advice based on your circumstances and long-term goals. We’ll walk you through the whole process, compare quotes from top insurers, and help you make an informed choice. Because when it comes to protecting your family and home, you deserve more than one-size-fits-all.
Speak to Our Life Insurance Experts
Get in touch with one of our experienced advisers today to discuss your needs. Whether you’re looking for mortgage life assurance, joint life insurance, or simply need guidance on how much life cover is right for you — we’re here to help.
What our expert says…
Can I have multiple life insurance policies at the same time?
Yes, you can have multiple life insurance policies at the same time, and in some cases, it may be a smart way to ensure comprehensive financial protection for your loved ones. This approach is entirely legal and can be tailored to meet different financial responsibilities or life stages.
For example, one life insurance policy might be designed to cover your mortgage (mortgage life insurance), while another provides income replacement or supports your family’s ongoing living expenses. Having separate policies can allow you to structure your life cover more precisely, and adapt it as your financial needs evolve.
Before taking out more than one policy, it’s a good idea to speak with a qualified adviser. At Ascot Mortgages, we can help you understand your options and recommend the most suitable life protection insurance for your circumstances, giving you confidence your cover is both effective and responsible.
Richard Johnson, Protection Specialist Adviser
Apply for a Protection
Get things moving, apply for a protection.
Call Now - 01925 711 558
Free unbiased protection advice is just a phone call away
FAQ
Life insurance is designed to provide financial protection to your loved ones in the event of your death. Most policies cover death caused by illness, accident, or natural causes during the policy term. Some policies also include a terminal illness benefit, which pays out early if you’re diagnosed with a condition expected to result in death within 12 months. The payout is typically a tax-free lump sum and can be used to pay off debts like a mortgage, cover living expenses, contribute to funeral costs, or ensure your children’s future financial stability. The level of cover depends on your chosen policy type and amount.
While life insurance offers broad protection, there are specific exclusions where a policy may not pay out. These often include suicide within the first 12 or 24 months of the policy, non-disclosure of medical conditions, or providing false information during the application process. In some cases, risky behaviours such as substance misuse or death resulting from participation in hazardous activities may also be excluded. Each insurer has their own terms and exclusions, so it’s important to read your policy documents carefully and speak with your adviser to fully understand what is and isn’t covered.
The best time to get life insurance is as early as possible, ideally when you are young, healthy, and financially stable. Premiums are generally lower the younger you are, and by securing cover early, you can lock in a more affordable rate for the entire policy term. Life insurance becomes especially important during key life events such as buying a home, getting married, having children, or starting a business. These milestones often come with financial responsibilities that make life insurance a wise and responsible choice for long-term planning.
While life insurance is not a legal requirement for securing a mortgage, it is highly recommended especially if you have a partner, children, or other financial dependents. Mortgage life insurance ensures that your home loan would be paid off in full if you were to pass away during the mortgage term, helping to protect your family from financial hardship. Some lenders may require life insurance as a condition of the loan, particularly in joint applications. Even when it’s not mandatory, having life cover in place offers invaluable peace of mind.
Missing a payment on your life insurance policy can put your cover at risk. Most insurers offer a grace period, usually around 30 days, during which you can make up for the missed payment without losing your policy. If payment is not received within this period, the policy may lapse, meaning you would no longer be covered. Reinstating the policy could require medical underwriting and may result in higher premiums. To avoid this, consider setting up a direct debit or automated payment to ensure your policy stays active and your protection remains in place.
Yes, many modern life insurance policies include a terminal illness benefit, which allows you to make an early claim if you’re diagnosed with a terminal condition that is expected to result in death within 12 months. This feature can provide vital financial support during a very difficult time, giving you the flexibility to manage your affairs, pay for care, or provide additional comfort to your loved ones. It’s important to confirm whether your policy includes this benefit and to understand the specific terms, as definitions of terminal illness may vary between insurers.
Yes, you can cancel your life insurance policy at any time. If you cancel during the initial cooling-off period, usually within 30 days of receiving your policy documents, you’ll typically receive a full refund of any premiums paid. After this period, you can still cancel, but you won’t receive any money back, as most life insurance policies do not have a cash-in value. Before cancelling, it’s worth reviewing your current and future needs, as getting a new policy later may be more expensive due to age or changes in health.
If you’ve stopped smoking since taking out your life insurance, it won’t automatically lower your premiums but you may be able to benefit from your improved health. Insurers typically require you to be smoke-free for at least 12 months before considering you a non-smoker. At that point, you could apply for a new policy with potentially lower premiums.
Writing your life insurance policy in trust means you nominate trustees to manage the policy and distribute the payout to your chosen beneficiaries when you pass away. This legal arrangement allows the proceeds to be paid directly to your loved ones without going through probate, which can significantly speed up the process. Additionally, life insurance held in trust is usually exempt from inheritance tax, meaning more of the benefit goes to your family. Putting your policy in trust gives you greater control over how your life cover is used, and ensures your wishes are carried out efficiently and tax-effectively.
Meet Our Team
