Hi Worried Milly,
I think it would be worthwhile to consider what the insurance is meant to cover.
My understanding (as it was when we took out our mortgage 20 years ago) was that the insurance was for your own protection, not the bank's. So that if you were a couple in your 20's, both working, planning to have children/with children - you would not have to worry about making the mortgage payments if your spouse died.
It would be worth approaching your current insurer, and maybe getting some other quotes, to see how much it would cost to cover your life, your husband's life and and your lives jointly. His diagnosis may make very little or no change to the costs - I suppose it depends on the term of the policy.
Given your age, and your children's age, it would probably be essential to cover your life, but including your husband on the policy may not be necessary.
I don't want to be too coldly-calculating, but really you would need to calculate what the financial impact of his death would be (loss of his pension and benefits vs. any widow's pension, etc.) to see how that compares to the cost of having him on the insurance policy.
You could always ask an independent financial advisor to help you review the options.
Take care,