How does mortgage protection work?
Mortgage protection insurance aimed at protecting the asset you have a loan on – your home. So, if you were to pass away before you finished paying off your mortgage and during the policy term, your loved ones would be able to continue living in the home, because the insurance would help pay off the rest of the loan.
With this sort of policy, you pay the same premiums for the policy term, and the value of your policy gradually decreases until it reaches £0 once the policy expires – and decreases in line with your mortgage (or other repayment loan). This is decreasing cover, as opposed to level or increasing cover, is that the value of the policy is enough to repay the loan, and the premium is usually lower than for other types of cover.