UK Mortgage Life Cover Calculator — Methodology

Last verified 5 May 2026 against ABI guidance on mortgage protection. Calculator at /uk/insurance/mortgage-life-cover-calculator/.

What this calculator does

Sizes life insurance cover to repay an outstanding mortgage on the death of the policyholder, choosing between decreasing term (matching capital repayment), level term (constant cover), and joint-life-first-death structures.

The formula

Decreasing term initial sum:
  initialSum = currentMortgageBalance
  Cover declines roughly in line with capital repayment
  schedule for the remaining term.

Level term:
  sum = currentMortgageBalance
  Stays constant for the policy term — simpler and pays
  more if the mortgage is repaid early.

Joint life first death:
  sum = totalMortgageBalance
  Single payout on the first death; cheaper than two
  single-life policies but provides one payout only.

Recommendation logic:
  if mortgageType = repayment AND noOtherDependants:
    suggest decreasing term
  else:
    suggest level term

Authoritative sources

• ABI — protection insurance guides
• MoneyHelper — mortgage life insurance
• FCA Handbook ICOBS

Assumptions and limitations

• Decreasing term schedule is approximated to follow a typical repayment mortgage amortisation; some insurers use a fixed annual reduction instead.
• Joint-life-first-death pays once; couples wanting two payouts need two single-life policies.
• Does not model critical illness riders, terminal illness benefit, or waiver of premium.
• Premiums depend on age, smoker status, health, and term — sizing only is provided here.
• Putting the policy in trust (often recommended to keep proceeds outside the estate for IHT) is a separate decision.

Source data

This calculator is rate-free — it does not depend on a tax-year rate table. The methodology and assumptions above are the source of truth.

Verification log

• 5 May 2026: Sizing methodology reviewed against ABI protection guides; rate-free calculation