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Do You Need Life Insurance for a Mortgage? Is It 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

Although it usually makes sense to consider taking out Life Insurance to cover your mortgage loan it is not normally compulsory.

It is important to have a think about how your loved ones would cope with the mortgage debt if you were to pass away.

  • Could they meet the monthly mortgage repayments?
  • Would they have sufficient income to maintain such a mortgage?

Given the cost of Life Insurance if you have a partner or family it is often worth considering irrespective of whether it is compulsory or not.

A simple Mortgage Term Insurance policy would pay out a cash lump sum equal to the outstanding mortgage debt allowing your loved ones to pay off the balance and remain in their family home.

If you are buying a house on your own and do not have a family to protect then Mortgage Life Insurance may not be as important.

Drewberry set up our insurance and were really helpful and made it very easy. I was really pleased at how responsive they are and how friendly and easy they made the whole process. I am delighted to be working with them.

Tara Wavre
13/03/2019
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