Hmm. I think 3xMama does have a point about the mortgage, actually, though I still don't think whole life is the answer.
No, to the very best of my knowledge, heirs are not responsible for their parents' debt. However, a mortgage doesn't just disappear when the parents die. The heirs only inherit the equity built up in the house.
In different times, that wasn't a big deal - the heirs just kept paying the mortgage while the house was up for sale, then they divvy up the proceeds from the sale.
However, in this post-housing-crisis world, that could be a tall order indeed. While the heirs aren't obligated to pay the mortgage, if the house goes to foreclosure, then they lose the equity, I would think. Which would obviously be a shame. And, in a worst case scenario, actually cause a loss for heirs if they struggle to make the mortgage payments and then still end up losing it (hopefully in such a case the heirs would realize the situation from the get-go and not make any payments and let the house go from the start, but I could certainly see it happening).
So, I would think you would want to have a large enough policy to pay off the home outright OR at least figure for some costs associated with the mortgage (enough to make payments for, say, a year, plus some money to fix up the house for sale, plus maybe some money to figure for the sales commission, which is especially important if the house must be sold in a down market, and gives the heirs some leverage to just move it quickly for a lower price) - AND make the term long enough to cover the length of the mortgage (say, a 30 year policy if you recently started a 30 year mortgage).
OP, I agree with your assessment that your policy needs to be larger than your DH's in your case.
And yes, it's important to figure out whether the combined amounts from both your policies would cover your guardian's needs. I would imagine this would probably be the case, but an important question.
Another question to consider is if you expect to pay for part (or all) your child(ren)'s college. (DH and I don't).