Return to the Mortgage Glossary Home to view explanations for all mortgage terms. What follows is the definition for the term Mortgage Protection Policy as it relates to mortgages in the UK. Mortgage Protection PolicyA mortgage protection policy is a life insurance policy which is designed to pay out enough upon your death to pay off the remainder of the mortgage. As such, the amount that the policy pays out, decreases over the term of your mortgage (typically 25 years). This way, the mortgage provider will have their mortgage paid off should you die before the term is up. This is a very good idea for you if you have dependents, such as a family, who you want to be able to carry on in your home after your death. Many mortgage companies will insist upon some form of life insurance policy being taken out with their mortgages, so they are protected should you die Many mortgage providers will have a mortgage protection policy that they can sell you, but it is often cheaper to shop around and find a better deal
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