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Do I need mortgage insurance?

  1. Simon H from Liverpool
  2. Finance questions and answers


Having recently applied for a mortgage I was asked If I wanted to get mortgage protection insurance with the mortgage I was applying for. I've recently heard a lot of horror stories about mortgage protection insurance with stories of lenders reducing coverage yet increasing premiums. I know insurance is a personal decision to make however would it be worth it in the long term to get mortgage protection insurance and are there any alternatives that might not be subject to the same problems as mentioned above?


As the single biggest purchase most of us will ever make it makes sense to protect it. Buildings insurance is a requirement and your mortgage lender will insist on this, for peace of mind and to protect your possessions and valuables etc contents insurance should also be considered. The term “Protection” has a number of different elements and these include but are not limited to the following:- 
Mortgage payment protection - Mortgage protection such as accident, sickness and unemployment cover can give you peace of mind knowing that in the event of redundancy or illness your mortgage payments will be made and your home will be safe.
Income protection - This offers borrowers the security of knowing that their essential repayments will be made if anything happens. For example, if you are in an accident and are unable to work for a while, a lack of comprehensive income protection cover means you will rely solely on state benefit - around £70 per week - which is unlikely to be sufficient to meet your mortgage repayments. This is where income protection can help as it provides a tax free monthly payment until you are able to return back to work.
Life assurance - Life assurance gives you peace of mind that your loved ones will be provided for should you die. There are many different ways to arrange life cover. Life assurance ensures that in the event of death your mortgage will be repaid and the costs not passed on to your dependents or loved ones.
By speaking to an independent mortgage and or protection adviser it could result in you finding a better deal than taking the deal offered by your mortgage lender. An independent adviser will be able to help you choose the best product for your circumstances and protection that provides the optimal affordable solution. 

Brian Murphy

Brian Murphy

Mortgage Advice Bureau

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Gar on 25/11/2023

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