The answer to this is simply No, you do not need life insurance to obtain a mortgage.
It is not a legal requirement nor do lenders insist you take out a life insurance policy to get a mortgage.
Lenders expect to be able to get back any money lent to you through the sale of the property if necessary, so life insurance isn’t about protecting them. It’s about protecting those closest to you who depend on your financial support.
How does life insurance work?
For example, If you have a joint mortgage you should ideally have a joint term assurance policy to cover the full mortgage liability over the same term as the loan.
If either of you passed away during the mortgage term the surviving party would be able to repay the mortgage debt.
When obtaining a joint mortgage it is very likely two incomes would have been used to afford that mortgage. In the event one of you passed away you would be leaving the surviving party fully responsible for the total mortgage debt.
A life assurance policy would eliminate that debt leaving your partner, spouse and may be even children being able to keep the family home mortgage free. Leaving those closest to you without the stress and worry of being fully responsible for the total monthly mortgage repayments and outgoings.
