Buying property in 2025 isn’t just about affordability—it’s about resilience. Lenders are more cautious, clients more exposed, and underwriters increasingly ask: what happens if the borrower can't pay?

As a result, life insurance and income protection are coming up more often in mortgage applications. But are they truly required? Or just sensible?

Here’s what borrowers, investors, and brokers need to know.

Are Protection Policies a Legal Requirement to Get a Mortgage?

Let’s be clear:

You’re not legally required to take out life or income protection to get a mortgage.

However:

• Lenders may strongly recommend it.
• Protection may be mandatory in some scenarios—particularly for high-value loans, private bank lending, or complex structures.

In many cases, your mortgage advisor or broker may advise protection as a condition of responsible lending, particularly when family or business risk is involved.

When Protection Is Often Required or Expected

Here are the most common scenarios in 2025 where life or income protection is either required or heavily encouraged:

🔹 Private Bank or HNW Lending

Private banks routinely expect robust protection planning as part of a wider risk assessment. For example:

• Life cover equal to the mortgage debt
• Critical illness or income protection to ensure repayment in adverse events

Explore more: Private Bank Mortgages Explained

🔹 Joint Borrowers With Unequal Earnings

Where one borrower is responsible for the majority of income, income protection for that person may be crucial. Lenders may request evidence that repayments can continue if they’re unable to work.

🔹 Family Protection & Estate Planning

If the borrower is the main provider for children or dependents, lenders may encourage life insurance, not just to protect the loan but to ensure family stability.

Read more: Inheritance Tax Planning with Whole of Life Policies

🔹 Buy-to-Let Portfolios in a Limited Company

While landlords aren’t often required to hold personal protection, business loan protection is becoming more common—especially when portfolio leverage is high.

Why Your Broker Might Urge You to Take Cover

At Willow, we’re frequently advising clients to think beyond what’s "required" and consider what’s wise.

It’s not just about protecting the lender—it’s about protecting:

• Your family
• Your business
• Your future borrowing capacity
• Your peace of mind

This is particularly important if you’re:

• Self-employed
• Buying with others
• Holding property in a trust or SPV
• Operating in multiple countries or currencies

More here: Mortgages for Self-Employed Borrowers in 2025

How Much Does Life or Income Protection Cost in 2025?

Cover costs vary based on:

• Age
• Health
• Occupation
• Level of cover
• Type of policy (e.g. decreasing term vs. whole of life)

In 2025, most income protection premiums are still tax-deductible for business owners, and joint life policies remain an affordable way for couples to protect mortgage liabilities.

What Happens If You Don’t Take Out Protection?

You may still get the mortgage—but you’ll be carrying more risk.

And in some cases, your application may be declined, particularly with:

• International banks
• Large interest-only borrowing
• Complex trust or offshore structures
• Mortgages for vulnerable borrowers

More: Can I Get a Mortgage with Complex Income?

Protection as a Strategic Tool

More and more high-net-worth clients are using protection as part of a smart financial strategy—not just a safety net.

For example:

• Whole-of-life insurance is being used to cover IHT liabilities on UK properties.
• Key person protection can secure finance against business continuity risks.
• Indexed income protection helps manage rising living costs over a long-term mortgage.

Final Word: Not Always Required—But Often Essential

No, life or income protection isn’t always mandatory for a mortgage in 2025.

But as the finance landscape evolves, lenders expect more planning, and smart borrowers are protecting more than just their loan.

If you're serious about building property wealth—or simply want financial peace of mind—protection isn’t an add-on. It’s a foundation.

📞 Want Help Protecting What Matters Most?

Book a free call with one of our protection specialists.

We’ll help you design a cover plan that protects you, your family, and your property ambitions.