Life Insurance and Critical Illness 2027
How life cover and critical illness cover work, how insurers assess you, and how to match both to your mortgage and family.
- What these two policies do and who they suit
- The main types of life cover
- Joint or single cover
- Writing life cover in trust
- Critical illness cover: conditions, definitions and extras
- Terminal illness and what is not covered
- How insurers assess you: underwriting and disclosure
- Premiums, reviewable or guaranteed, and indexation
- Mortgage protection and how payouts are taxed
- What may change in 2027
- Tips and tricks, common mistakes and a checklist
- How OMB can support you
The short version
Life insurance pays out if you die during the policy term. Critical illness cover pays out if you are diagnosed with a serious illness that meets the policy definition. This guide explains how each works, how insurers assess you and how to match cover to a mortgage and family.
- Decreasing term usually follows a repayment mortgage, while level term suits interest-only borrowing and family needs.
- Writing life cover in trust can speed up payment and may keep it outside your estate for inheritance tax, but trusts have legal consequences.
- Critical illness claims turn on policy definitions, so compare the wording and not only the price.
- Full, honest answers at application matter, because the law expects you to take reasonable care and careless answers can reduce a claim.
- Protection is subject to underwriting and policy terms, and cover stops if you stop paying.
Cover the mortgage first
match decreasing or level cover to your loan and term, then add family income benefit for living costs.
What the full guide covers
- What these two policies do and who they suit
- The main types of life cover
- Joint or single cover
- Writing life cover in trust
- Critical illness cover: conditions, definitions and extras
- Terminal illness and what is not covered
- How insurers assess you: underwriting and disclosure
- Premiums, reviewable or guaranteed, and indexation
- Mortgage protection and how payouts are taxed
- What may change in 2027
- Tips and tricks (8), common mistakes (6) and a 11 point checklist
- How OMB can support you, with a fictional worked example
Illustrative example: protection for a new family home
Priya and Tom are buying their first home and have a baby on the way. They want to protect the repayment mortgage and give their child security if one of them died. After a review, they arrange two single decreasing life policies for the mortgage, each written in trust, and a family income benefit policy on Tom, the main earner. They add critical illness cover on both lives and agree to review everything after the baby arrives. Names and circumstances are fictional and illustrative only, and cover depends on underwriting and policy terms.
Names, figures and circumstances are fictional and illustrative only. They do not represent an actual client of Our Mortgage Broker Limited.
Life Insurance and Critical Illness 2027
How life cover and critical illness cover work, how insurers assess you, and how to match both to your mortgage and family.
Want to talk it through?
We review your mortgage, family and existing cover, then compare insurers across the whole of the market. We charge no fee for protection advice and receive commission from the insurer, which we confirm before you proceed.
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Your home may be repossessed if you do not keep up repayments on your mortgage. Most buy-to-let and commercial mortgages are not regulated by the Financial Conduct Authority. Our Mortgage Broker Limited is authorised and regulated by the Financial Conduct Authority (FRN 944663). Registered in England and Wales, company no. 11358646. Registered office: 23 Berkeley Square, Mayfair, London W1J 6HE. There may be a fee for mortgage advice: we may charge up to 1% of the loan amount, and our typical fee is £500. Your fee agreement sets out the exact fee and when it is payable (at decision in principle, application or mortgage offer); fees are not refundable once due. We usually also receive commission from the lender. Protection and insurance products are subject to underwriting and the policy terms and conditions. This guide is general information only and is not personal advice. Case studies are fictional, illustrative examples and do not represent real clients. Rates, tax and regulatory information are correct as at October 2026 and may change, including at the Autumn Budget on 28 October 2026.