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One small step, one giant relief

Jack Tierney, Protection Adviser and Trainee Financial Planner at The Penny Group discusses life protection that works when it matters most

For many homeowners in the UK, a mortgage is the biggest financial commitment they will ever take on.

It’s a long-term responsibility, often stretching over 25 years, and while most people focus on interest rates and repayments, far fewer take the time to think about how the mortgage would be paid if something unexpected were to happen. This is where protection and insurance comes in.

A mother and child looking out of a window

How mortgage life insurance works

Life insurance, when arranged alongside a mortgage, offers a crucial safety net. Most people choose a decreasing term policy—this type of cover is designed to reduce over time in line with the mortgage balance. If the policyholder passes away during the mortgage term, the cover pays out a lump sum to clear the remaining loan. This means loved ones are not left dealing with a large financial burden at an already difficult time.

The hidden risk of having no protection

Choosing not to have life insurance on a mortgage is a bit like driving a car without a seatbelt. Most of the time, the journey is fine—just the usual bumps and potholes along the way. The type of car doesn’t matter—whether it’s a small city runaround or a family estate. What matters is what happens when something goes wrong. The biggest risks are often sudden, unexpected, and completely out of your control. And just like a seatbelt can be the difference between a scare and a tragedy, having the right protection in place for your mortgage can mean everything when the unthinkable happens.

Car in rural road for web

Real-life story: How life cover saved a family home

A real-life example shows how vital this protection can be. Two brothers were left with the family home after their father passed away unexpectedly. He had been the sole name on the mortgage. Thankfully, he had taken out a life insurance policy that matched the mortgage balance. The policy paid off the loan in full, allowing the brothers time to grieve without the added stress of financial pressure. Later, they have the ability to sell the home on their own terms and use the proceeds to help with deposits for their own properties.

Beyond debt: Life insurance as family financial security

Life insurance for mortgage protection isn’t just about covering a debt—it’s about safeguarding your home and your family’s financial security. It offers peace of mind that, should the worst happen, those left behind won’t have to worry about how they’ll manage the repayments. It’s a small decision now that can make a huge difference in the future.

Life protection - key statistics

-     35% of the UK population currently have a life insurance policy (Direct Line)

-     £4.85 billion was paid out in life insurance, income protection and critical illness claims in 2023. 275,000 payouts were made to customers in 2023. The average life insurance payout was £80,403 while the average critical insurance payout was £68,354.
Source: https://www.finder.com/uk/life-insurance/life-insurance-statistics

-     In 2022, cancer (34.2%) was the biggest reason for a life insurance claim. Heart-related claims were second at 21%, followed by neurological reasons (6.1%), Pneumonia (4.1%) and COPD (3.9%). COVID-19 claims accounted for 13%. However, this figure plummeted in 2022 to 1.3% of all claims paid. The number of COVID-19 claims dropped from 10,606 in 2021 to 3,846 in 2022.
Source: https://www.finder.com/uk/life-insurance/life-insurance-statistics

Speak to a financial adviser about your life insurance options

Remember, all decisions should be considered in the context of your own personal circumstances.

If you wish to discuss your protection options or your financial position, please contact one of our advisers.

You can reach us at info@thepennygroup.co.uk or on 0207 061 2345.

Jack Tierney

Jack is a Protection Adviser and Trainee Financial Planner at The Penny Group

Jack T for web 2

YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

The Penny Group Ltd is an appointed representative of The Openwork Partnership, a trading style of Openwork Limited which is authorised and regulated by the Financial Conduct Authority.

 

Approved by The Openwork Partnership on 09/06/2025

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