Life insurance
Life insurance pays out if you die during the policy term, so your mortgage can be repaid and your family protected. It’s the foundation of responsible borrowing — and inexpensive to put right.
What it covers
Life insurance pays a lump sum to your dependants if you die during the term. Set up alongside a mortgage, it ensures the loan can be cleared so your family isn’t left with the debt or at risk of losing the home.
Decreasing cover can track a repayment mortgage balance; level cover stays fixed and is often used for interest-only or family protection.
Why it matters for contractors
Without employer death-in-service benefit, an independent professional’s family has no automatic safety net. A modest monthly premium removes the risk that a mortgage outlives the breadwinner’s income.
- Decreasing cover to match a reducing repayment mortgage.
- Level cover for interest-only or to leave a fixed sum.
- Cover can be written in trust so it pays out quickly and outside the estate.
Getting it right
- Match the cover type and term to your mortgage.
- Consider writing the policy in trust.
- Combine with critical illness if you want both in one plan.
Life insurance, answered
How much life insurance do I need?+
Enough to clear the mortgage at least, and ideally to support your family’s living costs too. The right figure depends on your debt, income and dependants — we help you work it out.
Should my policy be written in trust?+
Often yes. Writing life cover in trust usually means it pays out faster and outside your estate, which can help with inheritance tax. It’s simple to set up at outset.
Level or decreasing cover?+
Decreasing cover follows a reducing repayment mortgage and is cheaper; level cover stays the same and suits interest-only mortgages or leaving a fixed legacy.