Is mortgage term life insurance compulsory?

To take out a mortgage is it also compulsory for me to take out mortgage life insurance so the bank would get the loan back if I died?

Question asked by Ben Pound
Compare Top 10 UK
 Protection
Insurers
 
Takes approx. 60 seconds
Type of Policy
Level of Cover
per
month
Date of Birth

Answered by Tom Conner

Although it usually makes sense to consider taking out life insurance to cover your mortgage loan it is not normally compulsory. If you were to pass away the lender/bank would be able to reclaim the remaining loan amount from your personal estate (thus rendering life cover irrelevant for the lender).

However, if you have a partner or family it is definitely worth considering mortgage life cover irrespective of whether it is compulsory or not. With a joint life plan the policy would payout a lump-sum to repay the loan if either partner were to pass away, leaving the remaining partner without a potentially unmanageable mortgage debt.

If you are buying a house on your own and do not have a family to protect then mortgage term insurance may not be worthwhile for yourself. However, taking out critical illness cover or an income protection plan to cover your loan/repayments if you became ill or injured is definitely worth considering. With critical illness plans it is usually cheaper to combine this cover with life insurance under one combined policy.

compulsory mortgage insurance
 
total mortgage protection
 
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.
Compare Top 10 UK Insurers
  Takes approx. 60 seconds
 - 
Need help? 
Call us on 

Frequently Asked Mortgage Protection Insurance Questions

 
I have a joint mortgage with my wife and a friend suggested that I take out joint mortgage life assurance...
 
I’m researching mortgage insurance at the moment but can’t quite work out how it works. Does the...
 
My partner and I have a joint mortgage together and I am currently looking in to mortgage insurance....
 
I want to take out mortgage life cover but wanted to know how long should I set the term of the cover,...
Need Help? Live chat now and get an instant answer from our Experts...

Neil
Pensions

Victoria
Insurance
Our Latest Reviews
Risheka Walls
26/07/2017

Victoria had excellent on the spot knowledge and vast experience in my line of work. Even where she didn't know, she was able and willing to promptly clarify with colleagues and insurers.

Sian Morrison
24/07/2017

Steffan is a credit to Drewberry. He's knowledgeable, helpful and efficient. I would highly recommend his excellent quality of service. Thank you.

Paula McClean
28/07/2017

Sam Carr was very thorough in explaining everything to me and did it in a way that I could understand and make the right decision for myself.

We are rated 4.9/5 based on 1129 independent client reviews.
To read more of our independent client reviews click here →
REVIEWS
EXCELLENT
4.92 / 5 Average
1,172 Reviews
D
Overall Rating
Jake was very knowledgeable and took as much time as I needed to ensure that I understood my options in sufficient detail. I did not feel rushed at all when considering Accident and Sickness insurance. Excellent customer service and thoroughly professional in all aspects. I have no hesitation in recommending Drewberry Insurance and in particular Jake Beal.
S
Overall Rating
Steffan Alemanno From Dreberry went that extra mile to help me out in what I needed .Very much appreciated . 5 stars
J
Overall Rating
Quick and promt
J Taylor
Overall Rating
Straight forward efficient service
A Barry
Overall Rating
Sam Barr-Worsfold dealt with setting up my insurance and the service was excellent. He was friendly and spent a lot of time explaining the various policies and answering my many questions, much appreciated. Also the chap who went through the application with me was great too -very helpful and friendly (sorry I have forgotten his name). I would definitely recommend your services.