The risk this tool addresses
For most families the mortgage is the largest single debt. If the main earner dies, the loan does not disappear, and the surviving household may struggle to keep making payments. Mortgage protection cover is designed to pay the lender, or give your family the cash to do so, so the home stays secure.
What you will see
- Suggested cover: the current mortgage balance, which is the amount needed to clear the loan.
- Monthly payment: the standard repayment for your balance, rate and remaining term.
- Interest still to pay: total future payments minus the balance.
- Estimated term premium: an illustrative price for a policy at age 40.
The math
Payment = balance x r / (1 - (1 + r) ^ -n), where r is the monthly rate and n is the number of months
Worked example
On a $250,000 balance at 6.5 percent with 25 years left, the monthly payment is about $1,688. Over the remaining life of the loan the interest alone would add up to roughly $256,405. Covering only the balance clears the principal; a family that also wants help with interest-heavy early years may choose a larger amount.
Decreasing term versus level term
Some lenders offer decreasing term policies where cover falls with the loan balance. They are cheaper but inflexible. A level term policy of the same length keeps the full amount, which gives your family spare cash after the loan is cleared and works even if you refinance or move. Compare both before choosing.
Questions to ask before buying
- Does the payout go to the lender or to my family?
- What happens if I refinance, move or pay the mortgage off early?
- Is the premium guaranteed for the whole term?
- Would a bigger policy cover living costs as well?
To include everything beyond the home loan, use the Life Insurance Needs Calculator. For pricing, try the Life Insurance Premium Estimator, and read about term and whole life policies if you are unsure which type to buy.
Frequently asked questions
Is mortgage life insurance the same as normal life insurance?
Not exactly. Lender-sold products often pay the lender and fall as your balance falls. Standard term insurance pays your family, who decide how to use it.
Should the term match my mortgage?
Usually yes, so the cover lasts as long as the debt. Add a few extra years if you want a safety margin.
Does the estimate include fees?
No. It is a model, so request real quotes for exact prices.
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Edited and checked by Talha Shah. Last reviewed 2026-10-17.