Life insurance when buying a home
Buying a home is a big financial commitment. Find out how life insurance fits into the home buying process, what cover people often choose, and what to consider as you get ready to move.
Published: 9 July 2026
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Do you need life insurance to get a mortgage?
There’s no law that says you must have life insurance to take out a mortgage. Some lenders may encourage you to get it, and a small number may require it as part of their lending criteria, but most of the time it’s your choice.
Many buyers still choose to take out life insurance when buying a home because:
- a mortgage is a large, long term financial responsibilitya mortgage is a large, long term financial responsibility
- they want loved ones to be able to stay in their home if something were to happenthey want loved ones to be able to stay in their home if something were to happen
- arranging it during the buying process is often easierarranging it during the buying process is often easier
- cover may be cheaper when taken out earlier in lifecover may be cheaper when taken out earlier in life
If you’re new to life insurance, learn more about life insurance in our guide - What is life insurance?
How life insurance can help with your mortgage
Life insurance pays out a lump sum if you die during the policy term. Your beneficiaries can choose how to use the money, which could include:
- helping to pay off the mortgagehelping to pay off the mortgage
- covering monthly repaymentscovering monthly repayments
- managing other household costsmanaging other household costs
- avoiding the need to move home during a difficult timeavoiding the need to move home during a difficult time
Life insurance doesn’t automatically go to the lender. Your beneficiaries decide how the payout is used.
You can learn more about beneficiaries in our guide - What is a life insurance beneficiary?.
What type of life insurance works for mortgage protection?
Homeowners usually choose one of two types of term life insurance: decreasing cover or level cover.
Decreasing cover
Often used for repayment mortgages.
- Your cover amount reduces over timeYour cover amount reduces over time
- Your monthly payments stay the sameYour monthly payments stay the same
- Designed to broadly match how a repayment mortgage decreasesDesigned to broadly match how a repayment mortgage decreases
- Usually the more affordable optionUsually the more affordable option
Here's a simple example of how decreasing cover might reduce over a 25-year £200,000 repayment mortgage.
Level cover
Often used for interest only mortgages or wider family protection.
- Your cover amount stays the same throughoutYour cover amount stays the same throughout
- Monthly payments stay the sameMonthly payments stay the same
- Can help repay a mortgage and cover other living costsCan help repay a mortgage and cover other living costs
- Typically costs more than decreasing coverTypically costs more than decreasing cover
To compare both types in more detail, see our guide - Types of life insurance explained.
Comparison: decreasing vs level cover
|
Feature |
Decreasing cover |
Level cover |
|---|---|---|
|
Cover amount |
Reduces over time |
Stays the same |
|
Monthly payments |
Stay the same |
Stay the same |
|
Common use |
Repayment mortgages |
Interest only mortgages, family protection |
|
Typical cost |
Usually, lower |
Usually, higher |
|
Payout |
Matches reducing mortgage |
Fixed lump sum |
Life insurance when buying a home as a couple
If you’re buying a home with a partner, you can choose either a joint policy or two single policies.
Joint policy
- Covers two people under one policyCovers two people under one policy
- Pays out oncePays out once
- Usually cheaper than two separate policiesUsually cheaper than two separate policies
- Ends after the payout is madeEnds after the payout is made
Two single policies
- More flexibilityMore flexibility
- Each partner chooses their own cover amount and termEach partner chooses their own cover amount and term
- Each policy pays out separatelyEach policy pays out separately
- Each partner can have their own chosen beneficiariesEach partner can have their own chosen beneficiaries
There’s no right or wrong choice. It depends on your shared financial responsibilities and what feels suitable.
Buying your first home after renting
Many people think about life insurance for the first time when moving from renting to owning. That’s because buying a home:
- brings a long term financial commitmentbrings a long term financial commitment
- often involves buying with a partneroften involves buying with a partner
- prompts people to think about financial security more broadlyprompts people to think about financial security more broadly
If you’re new to cover, see our guide - Life insurance for your family.
Myth busting: common questions
"Is life insurance compulsory for a mortgage?"
No, but lenders may recommend it.
"Will my mortgage lender get the payout?"
No. Life insurance, when in a trust, pays beneficiaries, not lenders.
"Does life insurance automatically clear the mortgage?"
No, but many people choose a cover amount that could help repay it.
"Do I have to buy life insurance from my mortgage broker?"
No. You’re free to choose a provider that suits you.
Reviewing your life insurance when moving home
If you already have life insurance, a house move is a good moment to check:
- whether your existing policy covers all your needswhether your existing policy covers all your needs
- if you need more (or less) coverif you need more (or less) cover
- whether your cover amount still aligns with your new mortgage amountwhether your cover amount still aligns with your new mortgage amount
- who your beneficiaries arewho your beneficiaries are
- whether putting your policy in a trust could help (see our guide - Should you put your life insurance in a trust?)whether putting your policy in a trust could help (see our guide - Should you put your life insurance in a trust?)
Checklist for home movers
Here’s a simple checklist you can use when buying a new home:
Things to think about
- Your new mortgage amountYour new mortgage amount
- Mortgage type (repayment or interest only)Mortgage type (repayment or interest only)
- Whether decreasing or level cover suits your situationWhether decreasing or level cover suits your situation
- Joint vs single policiesJoint vs single policies
- Updating your beneficiariesUpdating your beneficiaries
- Whether to use a trustWhether to use a trust
- Whether your existing policy still suits your new needsWhether your existing policy still suits your new needs
Useful external resources
- GOV.UK moving home checklistGOV.UK - moving home checklist
- MoneyHelper home buying guidanceMoneyHelper - home buying guidance.
- Citizens Advice moving home support Citizens Advice - moving home support.
These independent sources offer practical help throughout the moving process.
When should I take out life insurance during the home buying process?
There’s no set rule, but many people choose to arrange life insurance:
- around the time they apply for a mortgagearound the time they apply for a mortgage
- when they receive a mortgage offerwhen they receive a mortgage offer
- before exchanging contractsbefore exchanging contracts
- when preparing to movewhen preparing to move
Arranging it earlier means you have cover in place from the beginning of your new financial responsibility.
Why get Tesco Life Insurance?
At Tesco Insurance, we want to help you with the things that matter most. That’s why Tesco Life Insurance comes with a Big Win and lots of Little Helps.
- Clubcard Prices - Save on Tesco Life Insurance with your Clubcard.Clubcard Prices - Save on Tesco Life Insurance with your Clubcard.
- Your Big Win - Get a welcome gift after you've paid 6 months' premiums. Available on policies with a 3-year minimum term. T&Cs apply.Your Big Win - Get a welcome gift after you've paid 6 months' premiums. Available on policies with a 3‑year minimum term. T&Cs apply.
- Your Little Helps - Get a full year of coupons in your Tesco grocery app to help you shop at Tesco. T&Cs apply.Your Little Helps - Get a full year of coupons in your Tesco grocery app to help you shop at Tesco. Available on policies with a 3‑year minimum term, Clubcard app required and must be opted in to Tesco marketing. T&Cs apply.
As well as your Tesco benefits, you’ll also get Aviva DigiCare+ - a health and wellbeing service from Aviva that includes unlimited Digital GP consultations and the Bupa Anytime HealthLine.
Tesco Life Insurance is provided and administered by Aviva, who have a 5-star Defaqto rating for life insurance and pay out on 98.7% of claims*.
Help for Life Insurance customers
Get help and support online. Or find out how to contact Aviva, our life insurance provider.
Important information
About Tesco Life Insurance
Tesco Life Insurance is arranged, administered and underwritten by Aviva Life & Pensions UK Limited.
Tesco Personal Finance Ltd acts as an introducer to Aviva Life & Pensions UK Limited which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Member of the Association of British Insurers. Firm Reference Number 185896.
Aviva Life & Pensions UK Limited. Registered in England & Wales No. 3253947. Registered Office: Aviva, Wellington Row, York, YO90 1WR. Tesco Personal Finance Ltd and Aviva Life & Pensions UK Limited. are not part of the same corporate group.
About Tesco Insurance
Tesco Insurance is a trading name of Tesco Personal Finance Ltd, Registered Office: 2 South Gyle Crescent, Edinburgh, EH12 9FQ (registered in Scotland, no SC173199) which is authorised and regulated by the Financial Conduct Authority (register no. 186022).
Aviva DigiCare+ app
With the Aviva DigiCare+ app, you can start using a range of health and wellbeing services when you take out your policy.
Members of your family can use it too, as long as they're eligible.
The Aviva DigiCare+ app is provided by Square Health. The services are provided by Square Health and other selected partners.
You'll find full details about the services in the app, along with the terms and conditions, residency restrictions and privacy policy.
Aviva DigiCare+ is a non-contractual benefit that could be changed or withdrawn by Aviva at any time. So, it won't appear in any contract you've signed, or in any terms and conditions.
Life Insurance policy booklets
Please check the policy documents to make sure the cover you’ve chosen meets your needs.
The policy booklet and product information documents tell you about the benefits, limitations and exclusions that’ll apply to your cover.
Tesco Life Insurance is provided, administered and underwritten by Aviva Life & Pensions UK Limited.
Aviva have a 5-star rating for life insurance from Defaqto. And they pay out on 98.7% of life insurance claims*.
*Aviva UK individual claims report 2026, based on claims paid in 2025.
Learn more about Life Insurance
Find the right cover to give financial support to your family after you’ve gone. Tesco Life Insurance comes with Clubcard Prices, Tesco perks and Aviva DigiCare+.