Mortgage life insurance will pay off the mortgage while the private mortgage insurance will cover 80% of the amount of the loan of the lender in case of default.
If there is property that is not covered by life insurance or any other second mortgages that do not have life insurance, then this property might be sold off.
When someone dies, even if it is your spouse or any other near relative, their debt is paid off from their 'estate'. No one is responsible to pay off the deceased debts except for some conditions.
The estate of the deceased will include all the property, investments, possessions and the money (which also includes the cash from insurance) that the person has left behind.
A spouse or a near relative is responsible for paying off the debts of the deceased if he or she had a joint loan or agreement or if they provided a loan guarantee for the debts. A husband or a wife or civil partner therefore does not become automatically responsible for paying off the debts of the deceased spouse or civil partner.
If you jointly owned a home with your spouse or partner, and there is not enough money to pay off the debts then you might have to sell off the home to pay the debts of the deceased.
If all the money of the deceased is not sufficient to pay the debts then the cash that has to be distributed to other people in the will would be withheld until the debts are paid off.