Does mortgage payment protection insurance cover death?

I have recently taken out a new mortgage with my husband and have been looking into some insurance. I like the idea of taking out mortgage payment protection to cover our repayments but wasn’t sure if this plan covered death or not?

Question asked by Russell Blackie
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Answered by Andrew Jenkinson

No, mortgage payment protection insurance (MPPI) does not include life insurance to cover death. The purpose of MPPI is to payout a monthly benefit in order help you to keep up to date with mortgage loan repayments should you have to cease working due to accident, sickness or unemployment (forced redundancy).

How can I protect my family financially if I die?

However, it is sensible to consider a mortgage protection plan to cover the risk of death. The type of policy you would need for this is mortgage life insurance. This policy would payout a lump-sum benefit to repay the mortgage should you pass away during the policy term.

What is mortgage life insurance?

Mortgage life cover is particularly popular with couples taking out a joint mortgage as it prevents one partner being left with a potentially unmanageable debt should one partner pass away (with subsequent loss to family income).

It also makes sense not only to cover the risk of death but also to consider adding critical illness cover to your life insurance plan. Including this option means that the mortgage could be repaid should either partner suffer a ‘critical illness’, with most plans covering around 35 serious illnesses and injuries (including cancers, heart attacks and strokes).

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This information does not constitute financial or other professional advice. You should consult your professional adviser or contact us directly on 02084327333 should you require financial advice. It is important to ensure any insurance policy you take out is suitable for your needs.
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