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Injury, redundancy, sickness, death – they’re all things we don’t really like to think about. However, if the worst were to happen, planning ahead can save you and your loved ones from more than just stress.

For most homeowners, your mortgage repayments will be your biggest monthly outgoing. That means it is also at the highest level of risk if you lose your income due to critical illness or redundancy. 

Mortgage protection insurance exists to protect those mortgage repayments in the event that you lose your income and can’t make those payments, giving you peace of mind that no matter what, your family home will be safe.

Decreasing term life insurance policies made to cover your mortgage repayments,  providing you and your loved ones with the security that comes with knowing your home is protected in the event of your unexpected passing. 

nowsure can also find policies that are designed to decrease in value over time, in line with the decreasing balance of your mortgage, which means you only pay for the coverage you need. 

With nowsure, you can rest assured that your mortgage will be taken care of, giving you one less thing to worry about during difficult times. Contact us today to learn more about our decreasing-term life insurance policies and how they can benefit you and your family.


So, how does your decreasing term life insurance work?

The value of your policy is typically worth the same as your mortgage, but this is usually calculated by an interest rate that is set by your insurance policy provider. 

If you die or are diagnosed with a terminal illness within the policy’s term, your family will be given a tax-free lump sum that’s generally used to pay off your remaining mortgage debt. 

As a result, a decreasing life insurance policy may be suitable for covering a repayment mortgage, relieving your family of this if you pass away. 

Homeowners find this helpful, especially if they will leave behind dependents they may not be able to afford to keep up with the payments without them. This could be because of a low monthly income, or children who are not yet self-sufficient. This type of mortgage protection policy could be useful for those looking for a fixed-term cover. 

With a policy in place, your surviving dependents are able to secure your house (no doubt that you’ll have put a lot of time and money into over the years) after you’ve passed away. 

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Applying for decreasing term life insurance is simple with nowsure

At nowsure, we’re specialists in helping our customers find the types of insurance and types of mortgage protection that are right for them. We’re not a mortgage broker or mortgage adviser, but we can offer our expertise to help you find the right income protection insurance and mortgage protection cover for you.

We take your individual circumstances into account to offer you a mortgage protection plan that makes sense for your monthly income, family situation, workplace policies, and mortgage costs, among many other factors.

To learn more about how we can help you protect yourself from loss of income for a significant period of time, please don’t hesitate to get in touch with our expert team.

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What is covered by mortgage protection insurance?

Mortgage protection life insurance can cover a few key situations, depending on your monthly premiums and the type of insurance you choose, including (but not limited to):

  • Critical illness (including mental health issues in some cases)
  • Death
  • Unemployment cover
  • An injury that leaves you unable to work

When it comes to payouts though, your mortgage protection payments will cover the exact amount of your mortgage payments when you need them.

MPPI will generally cover your mortgage loan as long as your repayments don’t exceed 65% of your gross annual salary, and it can be used for both repayment mortgages and interest-only mortgages, though you will need to ensure that you’re getting the right kind of cover for your mortgage agreement. You can generally get payouts for up to 12 months, or until your return to work (whichever is sooner). A mortgage payment protection policy can also cover both freehold and leasehold property mortgage payments.

What happens to your decreasing term life insurance if you pass away?

Holding a mortgage protection insurance policy might reassure you and your family in the event of your death, protecting them financially and covering your mortgage debt. 

With a decreasing term life insurance policy, the amount that is given to your loved ones decreases over time. This is because mortgage debts in general become smaller as time goes on (if you keep up with your monthly mortgage payments), so this type of policy has been designed to replicate this.

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The difference between life insurance and decreasing term life insurance

Decreasing term insurance and mortgage payment protection insurance are explicitly designed to protect your home under a mortgage agreement if you die or are unable to meet your monthly mortgage repayments due to redundancy, sickness, or injury.

Because the policy is tied to one specific asset (your mortgage), the monthly payments for decreasing term insurance are lower than a standard life insurance policy, but the payout will decrease over time as the mortgage amount becomes lower, and the policy term will eventually end if/when the mortgage is paid off. With a standard life insurance policy, the payout amount remains the same, regardless of how long you’ve been paying your monthly premiums (provided you are out of the policy exclusion period, which is usually between 30 and 180 days).

When it comes to life insurance coverage vs mortgage protection insurance, there are many different considerations to take into account. To learn more about which type of cover is right for you, to find the right instant mortgage protection policy for you, or to find alternatives to mortgage protection insurance, please don’t hesitate to get in touch with the expert team at nowsure.

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The pros and cons of decreasing term life cover

The benefits of mortgage life insurance include:

  • Affordability – Mortgage protection insurance premiums are cheaper than many other types of life and income protection cover. This is due to the decreasing payout over time.
  • Protection for your home – One of the key things many people look for in their life insurance policy is that there is enough money for their mortgage and family home to be protected. The amount paid out with decreasing term life insurance should decrease in line with the remaining amount left on your mortgage, or on your monthly mortgage payments at the time of the claim. This way, you can feel confident your home will always be protected.
  • It’s easier to get a mortgage with insurance – Most mortgage providers will require some type of life insurance to protect their investment, whether you’re looking on your own or as part of a joint mortgage agreement. Mortgage protection insurance is one of the most affordable types of coverage that will satisfy most mortgage lenders.

However, there are still some considerations you may wish to take into account when looking at decreasing term life cover:

  • The value of your payout – As time goes on, the amount you can claim on your MPPI will decrease as the outstanding value of the mortgage goes down. This means you’ll want to make sure the interest rate of your cover is set to change in line with the value of your mortgage.
  • No flexibility in your payout – Mortgage protection insurance is for just that, mortgage protection. Unlike traditional life insurance, there is no way to put the money in your payout towards anything other than your mortgage payments. If you or your family have other expenses to pay, an MPPI payment cannot be put towards this.
  • No maturity value: Upon the plan’s expiry, no maturity value will be provided should you outlive it. Your mortgage will simply be paid off and the insurance agreement will end.

Understanding your life insurance options with a joint mortgage

We understand that, when it comes to taking out a mortgage, there is so much to consider that the decision can feel overwhelming. If you are in this position, then it is worth checking out the different types of insurance that are available to you – particularly, a life insurance policy. 

In the UK, research has shown that, as of 2022, approximately 35% of Brits do not hold a life insurance policy. The same study found that a common reason for this is that the available policies are considered to be too expensive, despite other findings showing that 6 in 10 households thought it would benefit their family in the long run. 

There are many advantages to taking out a life insurance policy, with protecting your mortgage just tipping the iceberg. 

Whilst deciding which coverage you need may be simple enough if you take out a mortgage on your own, if you are taking out a joint mortgage with your partner or family member, then a joint life insurance policy might be a better fit for you. 

Single policy vs joint policy: How to make a decision

There are a variety of factors that could affect whether a single policy or a joint policy is best for your situation. The cost of these policies is also dependent on aspects such as your:

  • Age
  • Occupation
  • Health
  • Cover amount
  • Lifestyle

Some insurance providers may also have strict criteria when it comes to eligibility, so it is essential that you carefully read through their terms and conditions. 

Single policies

With two single policies, you and the other person are covered individually. This means the amount of cover is paid out when each person dies if the policies are still active. As such, any beneficiaries could potentially receive two payouts should you die within your policy terms. 

In the long run, two individual policies may possibly be the more expensive route. However, two single policies also mean that you are able to choose two different levels of cover, which could be useful if you or the other person is the main earner. 

The death of the main earner is more likely to impact the financial situation of your surviving family members, so a higher amount of cover for this individual could be considered. 

Joint policy

Single policies cover one person, whereas a joint policy can cover the mortgage for both people – in other words, only one payment will be received by the beneficiaries. This is the case for both types of joint policies – which are:

  • First death joint policy – Pays out in the event of the death of one of the policyholders 
  • Second death joint policy – Pays out in the event of the death of both policyholders 

In a first death joint policy, if one policyholder passes away, the surviving person will no longer have life insurance, meaning that they will have to take out another policy at a possibly higher premium to reap the benefits of a life insurance policy. 

Second death policies are often used for tax and estate planning purposes, or to support any surviving children. For this reason, it is also sometimes referred to as ‘dual-life insurance’ or ‘survivorship insurance’.

If you and your partner (or joint owner of the home) decide to separate or your relationship breaks down, it may be possible to split your joint policy into two single ones. However, this could lead to higher premiums for both and is entirely dependent on your insurance provider.  

Alternatively, you may also have the option of converting the joint policy into a single policy for one of you to cover the mortgage on the house. This means that the other person may then need to take out a new single policy under their name for themselves. 

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Considerations to make with your partner when choosing the right mortgage protection insurance

When deciding which mortgage protection insurance policy to go with, there are a few considerations that’d be wise for you and your partner to discuss ahead of signing your agreement. 

  • Research types of coverage – There are several types of mortgage protection coverage, each with its own unique features and benefits. Some of the common types include decreasing term life coverage, unemployment coverage, critical illness coverage – the list goes on. It’s important that you identify your precise needs in advance so the coverage best reflects the pay-out you’d be seeking in the event of a loss.
  • Check for pre-existing medical conditions – Some insurance providers do not cover pre-existing medical conditions and it could potentially raise your premium, so you might have to shop around; it is always a good idea to declare any medical conditions that you have otherwise your policy could be invalidated.
  • Understand the claims process – No matter if you take out a single or joint policy, it’s important that you and your partner read the full terms and conditions of how your provider processes claims. This ensures that there are no surprises when the time comes. All insurance policies have their own criteria, so put some time aside to do your research or speak to our expert team.
  • Be wary of dangerous products – Third-party scammers who are posing as life insurance providers could offer you misleading and fraudulent products; mortgage protection scams are commonplace, so make sure that you keep an eye out for signs like:
    • Threats of foreclosure
    • Asking for too much information that is irrelevant to your application
    • No licence number or a fake licence number
    • Demands for a fee or prepayment 

At nowsure, we offer affordable insurance products that our customers can rely on in difficult times. Our customer-centric approach means that you can expect a friendly team dedicated to providing clear and accurate information for as long as you need us.

For hassle-free mortgage protection insurance or further information, contact our expert advisors or request a callback today.

Helpful Guides

Not sure where to start? We've put together a range of guides to help you get to grips with life insurance.

Explore Life Insurance

Take comfort in the knowledge that your loved ones will be financially looked after when you’re no longer around to do it. It takes only two minutes to get a quote but can hopefully give a lifetime of reassurance.

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Life Insurance Home

Want peace of mind knowing your loved ones' future will be financially protected should the worst happen? Even if the financial future of your family looks stable without you, life insurance can help with funeral expenses, provide an inheritance, or cover extra childcare costs.

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Term Life Insurance

This type of policy offers a fixed sum assured, where the cover and premiums stay the same for the duration of your cover period, unless you make a change to your policy. This form of cover is also known as 'level term' life insurance.


Common Questions

Life insurance provide peace of mind that your partner or children with be financially looked after when you’re not around to do it yourself. If your dependants are still in school (or younger), or if your partner relies on your income it’s especially worth looking into. Ditto if your family is living in rented accommodation or in a house with a mortgage that you pay. If there’s any doubt they could keep up repayments without your salary, life insurance could be a solution.

Even if the long-term financial future of your family looks relatively stable without you, life insurance can be helpful to cover funeral expenses, provide an inheritance, or cover extra childcare costs if you’re not around.

Not everyone needs life cover. Some already have a policy through their employer, others may feel their partner earns enough for the family to live on. If you’re older and your children have flown the nest, it might also be unnecessary. The key question to ask yourself is whether your death would have a financial impact on the people you care about.

Compare multiple life insurance quotes to get a good idea of how much cover will cost you. It can start from as little as £5/month – possibly less than what you’re paying for your monthly Netflix subscription – but will vary depending on how much you want the policy to pay out, how long you want it to last, and other factors such as your age, medical history and lifestyle, including whether you smoke.

Don’t be tempted to lie about your circumstances to get a cheaper policy – any inaccuracies may invalidate a future claim. And remember that the best (by which we mean the cheapest) time to take out a policy is when you’re young and healthy, so don’t put it off either.

Put simply, life insurance works by paying a premium each month to your provider, which you’ll have to keep up for the duration of your policy. On your death, the people named in your policy (called your beneficiaries) will receive a tax-free lump sum or regular payments. How much this is depends on the level of cover you have chosen. And, of course, it’s also on the proviso that you die within the specified term of your policy.

It’s always advisable to compare life insurance quotes before taking out a policy. You and your family’s individual circumstances will determine how much cover you need and what you’ll have to pay in premiums. Other factors that may impact your life cover quote include your age and medical history.

Generally speaking, you’ll pay less for life cover the younger and healthier you are so, if you think you need it, it’s sensible to compare life insurance quotes as early as possible.

There are several events in life that inevitably make the question of whether to get life insurance more urgent. Buying a new home and taking out a mortgage is an obvious one. If you die before the loan is repaid, the responsibility for it will fall on your loved ones instead, so you need to think about whether they’ll be able to shoulder this without your income.

For other people, having a baby is their trigger to consider life cover. According to Child Poverty Action Group raising a child to the age of 18 in the UK in 2021 stood at £160,692 for a couple and £193,801 for a lone parent. Having a life policy in place, at least until children reach financial independence or have finished school, can give you peace of mind they’ll be provided for when you’re gone.

Even if you don’t have children, getting married or making any other long-term commitment to a partner can also be a reason to research life insurance. Whether you opt for a single or joint life insurance policy, your partner will be financially cared for on your death.

Life insurance is also relevant if you’re planning for a funeral and/or inheritance. According to the SunLife Cost of Dying Report 2022, the cost of a basic funeral in the UK was £4,056 in 2021. The lump sum your loved ones receive can be used to cover this, rather than it coming out of their own pockets. Alternatively the pay-out can make a difference for anyone looking to leave money to their children without inheritance costs. You can take out a whole-of-life insurance policy, which lasts until your death, to cover the inheritance tax bill you expect your heirs to have to pay.

Life insurance can cover your remaining mortgage, the rent, monthly bills, or loans and credit cards so there’s no immediate financial pressure on your loved ones if you die.

But it can also cover things like school and higher education, or childcare if your death necessitates this additional cost.

Sometimes the lump sum can be used as a gift, or simply to cover the cost of your funeral so it doesn’t come out of the family savings.

The most common policies are known as term life insurance. These cover you for a fixed amount of time and usually fall into two categories – decreasing term life insurance and level term life insurance.

Let’s start with decreasing term, which lets you choose how long you want the policy to run for. You’ll pay a monthly premium until that date, after which the policy ends and you’ll no longer be covered. The amount paid out decreases over time (hence the name), but you usually use this type of insurance to cover a mortgage, which also goes down with time too.

A level term policy, meanwhile, promises a lump sum for loved ones that always stays the same, whether you die in the first year of the policy, or the penultimate one. As a result it’s usually a bit more expensive than decreasing term insurance.

While the policies described above will cover you for a fixed amount of time, whole of life insurance has no ‘expiry date’. Your partner or children will receive a pay out whenever you die, and consequently this cover is a costlier option. It is often used to ensure a funeral can be paid for, or as part of inheritance tax planning.

Term life insurance only offers cover for a limited period of time. After your policy expires, you can’t claim any pay-out and the premiums you’ve put in won’t be returned.

An exception is return-of-premium life insurance, which will essentially refund what you’ve paid – but at the cost of much higher premiums while the policy lasts. What’s more, you usually have to hold the policy for the entire term and make all payments to get your money back.

Most people simply accept that life cover, like other types of insurance, is about weighing up the risks of not having it against the price you pay if you don’t need to claim. The peace of mind of knowing your family will be looked after if the worst happens often makes the decision easier.

When you near the end of a life insurance policy, it’s worth considering whether you still need cover. If your mortgage is paid off and your children have flown the nest, then you may not require it anymore. If you do want to continue, you could buy another policy or apply to extend your current one. But bear in mind your premiums are likely to be higher than they were for your original policy now that you’re older, and you may not meet all eligibility criteria.

Generally speaking, your life cover should start as soon as your application has been approved. This means that your loved ones will receive a pay-out whether you die in the first, fifth, 15th or 25th year of your insurance, as long as the policy has not run its term.

In some instances, however, the terms and conditions of the policy state that a waiting period is in place, so always read the details carefully before signing. This can happen in the case of a death by suicide, for example, where an exclusion period of 12-24 months from the start of the policy may apply.

Life insurance is often an affordable way to make sure your family stays afloat financially when you pass away. But its benefit is only truly maximised if it covers everything you want it to. Comparing life insurance on price level alone could mean your loved ones lose out for the sake of a just few pence more in your pocket each month. 

A smarter way to compare life cover is to be clear in your mind exactly what type of policy you’re after, how long you need it for and how much you want it to pay out. Once you’ve found several that meet your criteria, however, choosing the cheapest life insurance from the selection can make perfect sense. Always make sure you can afford the monthly premiums before you commit.

If you’re taking out life insurance to make sure your family will be taken care of financially after your death, you should consider aligning the term with the point at which you believe your family will be able to manage the household budget without you. For example, you might want the cover to last long enough to help your children complete full-time education.

If you expect your partner to remain financially dependent for longer than this, you might also want to build that into your calculations.