Introduction.
A mortgage is usually the largest commitment a household takes on. Protection makes sure it, and the people who depend on you, are looked after if illness, injury or death interrupts your income.
Most people insure their phone and their car without a second thought, but have no plan for how the mortgage would be paid if they could not work for six months.
This guide explains the main types of cover, how they fit together and how to work out what you actually need. We review any cover you already hold, including through your employer, and recommend only what fills a real gap.
The weekly rate of Statutory Sick Pay from 6 April 2026.
01Why protection matters.
The question is simple: if your income stopped tomorrow, how long could your household keep going?
If you are employed
Statutory Sick Pay is £123.25 a week from 6 April 2026, or 80% of your average weekly earnings if lower, for up to 28 weeks. Some employers pay more, for a limited time.
If you are self-employed
There is no sick pay at all. Your income stops when you stop working, and your business costs may continue.
State support
Help with mortgage interest through the state is a loan, not a grant, is means-tested and comes with a waiting period. It is not designed to replace your income.
| Each month | Amount |
|---|---|
| Mortgage payment | £1,667 |
| Statutory Sick Pay | £534 |
| Shortfall on the mortgage alone | £1,133 |
Illustrative: a £300,000 repayment mortgage over 25 years at 4.5%. Sick pay at £123.25 a week, averaged monthly.
Adviser’s note
We start with what you already have: employer benefits, savings and existing policies. Cover should fill a real gap, not duplicate what is there.
02Life insurance.
Life insurance pays out if you die during the policy term, and often if you are diagnosed with a terminal illness. It is the foundation of most protection plans.
| Type | How it works | Often used for |
|---|---|---|
| Level term | The amount of cover stays the same throughout the term | Interest-only mortgages and family needs |
| Decreasing term | Cover reduces over time, broadly in line with a repayment mortgage | Clearing a repayment mortgage, at lower cost |
| Family income benefit | Pays a regular monthly income for the rest of the term | Replacing income while children are young |
| Whole of life | Pays out whenever you die, provided premiums are paid | Estate planning and inheritance tax |
Joint or single policies
A joint policy covers two people but usually pays out only once, on the first death. Two single policies cost a little more but can pay out twice, and are easier to separate if circumstances change.
Cover through work
Death in service benefit is often a multiple of salary. It is valuable, but usually ends when you leave the job, so we treat it as a bonus rather than the plan.
03Critical illness cover.
Critical illness cover pays a tax-free lump sum if you are diagnosed with one of the serious conditions defined in the policy.
What it is for
The payment can clear or reduce the mortgage, cover treatment or adaptations to your home, or give you time to recover without financial pressure.
Definitions matter
Policies list the conditions they cover and the severity needed for a claim. Two policies with the same headline price can differ widely in what they pay out for. Comparing definitions is a large part of our advice.
Partial payments and children
Many policies pay a smaller amount for less severe conditions, and include some cover for children at no extra cost.
Be completely open
Answer every health and lifestyle question fully and accurately. Claims can be reduced or declined if information was not disclosed.
04Income protection.
Income protection replaces part of your income if illness or injury stops you working. It pays monthly until you return to work, retire or the policy ends.
Deferred period
Payments start after a waiting period you choose, typically 4, 8, 13, 26 or 52 weeks. Matching it to your sick pay or savings keeps the premium down.
How much it pays
Insurers cap the benefit at a proportion of your earnings, commonly 50% to 70% of gross income, to leave an incentive to return to work.
Full term or limited
Some policies pay for up to two or five years per claim; others pay until the end of the term. Limited policies cost less but leave a gap for long illnesses.
Occupation definition
The strongest policies pay if you cannot do your own job. Others pay only if you cannot do any suitable work.
With no sick pay to fall back on, income protection is often the first cover we look at for business owners and contractors.
05Writing cover in trust.
Placing a life or critical illness policy in trust is usually free, takes a few minutes and can make a significant difference to your family.
Faster payment
The payout goes to your chosen beneficiaries without waiting for probate, which can take months.
Outside your estate
Money paid into a trust is generally not part of your estate for inheritance tax.
Control
You choose who benefits and appoint trustees to manage the money, which is particularly helpful for young children or blended families.
When trust may not suit
If a policy is designed purely to repay a joint mortgage, other arrangements may be more appropriate. Trusts are a legal arrangement, and in complex situations you should take legal advice.
Adviser’s note
We set up trust forms with every suitable policy we arrange, and help you choose trustees.
06Buildings and contents.
Buildings insurance is a condition of almost every mortgage. Contents cover is optional, but rarely a corner worth cutting.
Buildings insurance
Covers the structure: walls, roof, floors and permanent fixtures such as kitchens and bathrooms. For freehold homes, cover usually needs to be in place from exchange of contracts.
Rebuild cost, not market value
The sum insured should reflect the cost of rebuilding, which can be very different from the price you paid. Your survey or valuation will often give a figure.
Leasehold flats
The freeholder or managing agent normally insures the building, with the cost included in your service charge. Ask for a copy of the policy.
Contents insurance
Covers your belongings against theft, fire and water damage. Accidental damage is usually an optional extra.
High-value items
Jewellery, watches, art and other valuables usually need to be listed individually above a single-item limit. For substantial collections, a specialist high-net-worth policy may suit better.
Check before you exchange
We can arrange buildings and contents cover alongside your mortgage, so it is ready on the day you need it.
07How much cover you need.
There is no single right answer. These are the questions we work through with every client.
- How much is left on the mortgage, and is it repayment or interest-only?
- What other debts would need repaying?
- How much income would your family need each month, and for how long?
- When would your children be financially independent?
- What would you need for childcare or care at home?
- What does your employer provide, and for how long?
- How long would your savings last?
- What existing policies do you already hold?
Building a plan
Most families combine more than one type of cover. A common starting point is life cover to clear the mortgage, family income benefit for living costs, and income protection for illness.
Review it regularly
Cover arranged years ago may no longer fit a larger mortgage or a growing family. We review it whenever your borrowing changes.
We design cover around what you can comfortably afford, prioritising the risks that would hurt most.
08Illustrative cases.
A couple buying their first home
Both employed, taking on a first mortgage with no existing cover beyond death in service.
- Challenge
- A limited budget and no plan if either could not work
- Approach
- Decreasing life cover for the mortgage, and income protection timed to employer sick pay
- Outcome
- The key risks covered within the monthly budget they set
A family that had outgrown its cover
Policies arranged ten years ago, before a larger mortgage and two children.
- Challenge
- Cover well below the new mortgage, with no income protection
- Approach
- A review of existing policies, keeping what still worked and topping up the gap
- Outcome
- Complete cover without cancelling cheaper older policies
These examples are illustrative and do not describe real clients.
09Questions and glossary.
Questions we are often asked
Is life insurance compulsory with a mortgage?
No. Lenders rarely insist on it, although buildings insurance is normally required.
I have cover through work. Is that enough?
Employer benefits are valuable but usually end when you leave. We take them into account and advise on any shortfall.
Will I need a medical?
Insurers ask health and lifestyle questions and sometimes request a medical report or examination, depending on your age, health and the cover.
Can I arrange cover without a mortgage?
Yes. Protection can be arranged on its own.
Glossary
- Term
- The length of time a policy runs.
- Sum assured
- The amount a policy pays out.
- Deferred period
- The wait before income protection pays.
- Terminal illness
- An illness expected to lead to death within a set period, often 12 months.
- Trust
- A legal arrangement holding a policy for beneficiaries.
- Rebuild cost
- The cost of rebuilding your home from scratch.
- Death in service
- Life cover provided by an employer.
- Underwriting
- The insurer’s assessment of your health and lifestyle.
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