Mortgage life insurance and critical illness cover
Advice on life and critical illness cover arranged around your mortgage: how much, what type, for how long, and in whose name. No fee for the advice, and no pressure to take anything.
A mortgage is usually the largest debt a household carries, and it does not stop when someone dies or becomes seriously ill. Life insurance can pay a lump sum towards the balance if you die during the policy term. Critical illness cover can pay a lump sum if you are diagnosed with a condition the policy covers.
We review protection alongside the mortgage rather than selling it separately. That means looking at what you already have first, then comparing policies and definitions from different insurers where there is a genuine gap.
It is worth a conversation if
- You are buying, remortgaging or borrowing more
- A partner or children rely on your income
- You own buy-to-let property with a mortgage on it
- You have cover already but are not sure it still matches the loan
- You are unsure what your employer's death-in-service benefit is worth
Life insurance and critical illness cover: the difference
Life insurance pays a lump sum if you die during the term of the policy. With a mortgage, the usual aim is to clear or reduce the balance so the people you leave behind can stay in the home.
Critical illness cover pays a lump sum if you are diagnosed with a serious illness that meets the policy's definition, such as certain cancers, heart attacks or strokes. The money can go towards the mortgage, time off work or adapting your home.
Types of mortgage life insurance
| Decreasing term | Level term | |
|---|---|---|
| What pays out | Falls over the term, roughly in line with a repayment mortgage balance | Stays the same throughout the term |
| Usually suits | Repayment mortgages | Interest-only mortgages, or covering family needs as well as the loan |
| Cost | Usually cheaper for the same starting amount | Usually more expensive |
| Watch for | A gap can open if you borrow more, extend the term, or your mortgage rate is higher than the rate the policy assumes | Inflation reduces what a fixed sum is worth over a long term |
Life insurance with critical illness cover: combined or separate
The choice changes how many times cover can pay.
| Combined (accelerated) | Separate policies | |
|---|---|---|
| How it pays | Once, on diagnosis or death, whichever comes first. The policy then ends | Life and critical illness cover can each pay, so potentially twice |
| Pros | Usually costs less than two policies; one lump sum aimed at the mortgage | Life cover carries on after an illness claim; amounts and terms can differ |
| Cons | No life cover left after an illness claim, and new cover may be hard to get | Usually higher total premiums; two policies to keep track of |
Joint or single policies
A joint policy covers two people and pays once, usually on the first claim, then ends. It is often cheaper than two single policies. Two single policies can each pay out, and are simpler to keep if a relationship ends.
What critical illness cover typically covers
Most policies cover the conditions that lead to most claims, including cancer, heart attack and stroke. The Association of British Insurers (ABI) publishes a Guide to Minimum Standards for Critical Illness Cover with model definitions for common conditions, and many insurers use or improve on them.
Beyond that, policies vary. Some pay partial amounts for less severe conditions, some include children's cover, and the list of conditions and the exact wording differ from insurer to insurer. A condition being named on a policy does not mean every diagnosis of it qualifies. That is why we compare definitions, not just prices.
Do claims get paid?
According to the ABI, insurers paid 97.9% of individual protection claims in 2025, and 65% of critical illness claims were for cancer (ABI, published June 2026). Market figures do not predict any single claim: each is assessed against the policy terms, and incomplete answers on the application can lead to a claim being reduced or declined.
Do I need life insurance for a mortgage?
No. It is not a legal requirement, and residential lenders rarely insist on it. People consider it because the mortgage payments carry on regardless, and a partner on one income may not be able to keep them up. If nobody relies on you financially, you may need little or none.
What affects the cost
- Your age and health, including medical history
- Smoking or recent nicotine use
- The amount of cover and the length of the term
- Decreasing or level cover, and whether critical illness is included
- Guaranteed premiums, which stay fixed, or reviewable ones, which can rise
Critical illness insurance for buy-to-let landlords
Buy-to-let lenders do not usually require cover, but a serious illness can still affect a portfolio: mortgage payments, voids, repairs and tenant management all continue. Landlords often look at level term cover to match interest-only loans, and critical illness cover to give them room to reduce borrowing or pay for management while they recover.
If you let through a limited company or run a business, there are also business protection options, such as relevant life cover for directors and key person cover. We can discuss whether these are relevant when you get in touch.
Most buy-to-let mortgages are not regulated by the Financial Conduct Authority. The tax treatment of business protection depends on individual circumstances; we are not tax advisers and this is not tax advice.
Reviewing existing cover and death-in-service benefits
Many people already hold some cover, often without realising. Public sector schemes such as the NHS Pension Scheme, police pension schemes and the Armed Forces Pension Scheme include benefits if a member dies in service, usually linked to pensionable pay. These are valuable, but they normally end when you leave the job and rarely include critical illness cover. Our guides for NHS staff and military personnel cover the mortgage side.
See why reviewing your insurance alongside your mortgage is worth doing.
Writing a policy in trust
Placing a life policy in trust means the payout goes to the people you choose, usually without waiting for probate, and it may keep the money outside your estate for inheritance tax. Insurers commonly provide trust forms. With critical illness cover, the trust needs to allow for the illness benefit to be paid to you. We can explain trusts in general terms, but we do not give legal advice.
Inheritance tax treatment depends on your circumstances and may change. We are not tax advisers and this is not tax advice.
How we help
Look at what you have
Your mortgage, any existing policies, employer benefits and savings, so we start from the real gap.
Work out what you need
How much cover, for how long, decreasing or level, joint or single, and whether critical illness cover fits your budget.
Compare insurers
Premiums and, just as importantly, what different insurers define as a critical illness.
Set it up properly
Help with the application and disclosure questions, information on trusts, and cover timed to start when you need it.
There is no fee for our protection advice. Cover is subject to the insurer's underwriting and the policy terms.
What is mortgage life insurance with critical illness cover?
It is life cover set up to match your mortgage, with critical illness cover added. On a combined policy, it pays once, on death or a qualifying diagnosis, whichever happens first. Whether it pays depends on the policy's definitions and terms.
Is mortgage protection the same as life insurance?
"Mortgage protection" is used loosely. It often means decreasing life cover, but it can also mean critical illness cover or income protection, which pays a monthly amount if you cannot work. See our income protection page and our guide to mortgage protection.
Can I get cover with a health condition?
Often, yes, although the insurer may charge more, exclude the condition or decline critical illness cover. Different insurers take different views, and full disclosure on the application is essential.
What happens to my cover if I remortgage?
Your policy is not tied to your lender, so it usually continues. If you borrow more or extend the term, the cover may no longer match, which is why we check it at each remortgage.
Do you only advise people in Birmingham?
No. Our office is on Cherry Street in the city centre, and advice is given by phone, email and video to people across the UK.
Check your cover matches your mortgage
Tell us about your mortgage and any cover you already hold, and an adviser will talk it through with you. No fee, and no obligation to take a policy.