Mortgage Protection Insurance Information

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Everything you need to know about Mortgage Protection Insurance

What is Mortgage Protection?

Mortgage Protection Insurance is a type of Life insurance policy that will run for the length of your mortgage and pay off the remaining mortgage balance if you were to die during the term.

Mortgage Protection is an insurance policy that has been specifically designed for loans as it decreases in line with the loan over the term it is taken out over.

Is Mortgage Protection Compulsory in Ireland?

Yes, in Ireland you must have a mortgage protection policy in place to draw-down your mortgage. Your lender is legally obliged to ensure you have sufficient cover in place before they transfer any funds.

There are some exceptions. If you would like to discuss these further place contact one of our consultants on 01-8327250.

The Different types of Mortgage Protection Insurance 

Reducing Term Cover: Mortgage Protection Cover will reduce or decrease with your mortgage. It will reduce on the interest rate that you choose. The industry standard is 6%, this protects you against possible rising interest rates in the future. Your premium will remain the same each month but the amount of cover you have will decrease as you pay your mortgage off. At the end of your mortgage term your loan will be paid off and the sum insured on your policy will have fallen to zero.

Level Term Cover: A level term policy is for the full mortgage balance and does not decrease in line with the mortgage over the term.

If a claim were made this policy would always pay out the original mortgage amount, the bank would take from that what they are owed and the surplus remaining would be paid to the surviving partner or beneficiaries as life insurance.

What does Mortgage Protection Insurance Cover?

Mortgage Protection will pay off your mortgage in the event of death. There are also additional features that are included in your policy, free of charge, but you can also decide to add other benefits to your policy. Some of the benefits that are usually covered as standard are:

  • Children's life insurance
  • Terminal illness benefit
  • Guaranteed insurability option
  • Accidental death cover 

Add-ons that you can choose to add to your policy are:

  • Serious Illness cover
  • Medical free conversion
  • Waiver of premium
  • Cancer cover
  • Hospital cash cover
  • Broken bones payment
  • Total permanent disability cover

How much does Mortgage Protection insurance cost?

You can take out cover for as little as €10.00 per month. The premiums are calculated by looking at your age, smoking status, amount to be insured and the term you are taking the policy out over. This calculation will give you your standard rate premium. There are some factors that may affect your standard rate premium, these include:

  • Your health
  • Your occupation
  • Hazardous Sports
  • Family Health History

When completing the mortgage protection application form it is so important to answer all questions honestly. If you do not fully disclosure all facts about yourself this may result in any of the following:

  • Claim will not be paid out
  • Your policy may be cancelled 
  • You may have difficulty getting cover elsewhere

If you have any questions in relation to underwriting please don't hesitate to get in contact with one of our consultants on 01-8327250. 

Applying for Mortgage Protection Insurance

The first step in applying for mortgage protection is talking to one of our consultants who will generate your quote for you and advise you on what the best policy for you is.

Once you are happy to proceed we will send you an application form, which can be completed online via DocuSign.

When we receive your completed application form we submit your details to the underwriting team in the insurance company and we will usually have an update for your within 24 hours.

All going well, once you are approved for cover we can either place your approval on hold until you are ready to close your mortgage or issue your policy straight away.

If you are not approved and the underwriting team need further medical information to make their decision, we will come back to you and ask you for this information or the underwriting team may contact your GP directly.

Why Choose Mortgages.ie?

Having been around for over 20 years we know our stuff!

At Mortgages.ie we search the market and analyse the latest offers and then add discounts of up to 20%, to ensure you get the best policy for your needs with the best quote in the market. Our chart below gives an indication of the monthly savings when arranging your mortgage protection through mortgages.ie.

We also offer free advice on mortgages and our mortgage consultants would be delighted to chat to you about any aspect of your mortgage.

Looking forward to helping and guiding you through this exciting time,

Alyson Lavin B.A.

Mortgage Protection Manager

Get your Mortgage Protection Quote Here

 

Mortgage Protection Insurance Comparison Chart example

June 2021

Based on €250,000 cover.

Applicants non smokers, age 31 and 34.

Term 30 years.

Company  Mortgage Protection Insurance Term Insurance
Aviva €23.15 €37.22
New Ireland €26.67 €39.40
Zurich €24.68 €38.02
Royal London €27.37 €40.31
Irish Life €29.23 €44.39
     
Mortgages.ie discounted quote  €19.45 €31.37


The monthly savings really add up on both mortgage protection insurance and life insurance - so why pay more than you need to!

 

Get your mortgage protection insurance quote and start saving

Established in 1994 and regulated by The Central Bank of Ireland, we have partnered with Ireland's leading Life insurance companies to advise you and to save you money!

As one of Ireland's leading independent mortgage protection advisers, we provide you with independent advice on the merits of competing mortgage protection and life insurance policies.

Many mortgage protection policies are sold directly by lenders, who do not research the market on behalf of the customer. If you don't search the market the chances are that not only will you end up buying more expensive policies than are available, but you also run the risk of missing out on benefits that other providers include as part of their policy.

These additional benefits range from illnesses that one insurer may not have not been covered under a serious illness policy, to less favourable indexation factors in a term insurance policy or other fringe benefits, like a free second medical opinion or assistance from a nurse in dealing with medical conditions.

Here at mortgages.ie our role extends beyond saving money by arranging cheaper cover to a more important issue of ensuring you get the best policy for your circumstances.

To go directly to our mortgage protection calculator and quote engine please click

Mortgage protection insurance quotes.

Mortgage protection insurance is a life insurance policy that pays off your mortgage, if you or your partner dies, before the mortgage is paid off.

The policy has a term identical to your mortgage and the benefits reduces as the balance on your mortgage decreases.

In general, a mortgage protection policy is a condition of a mortgage loan.

To summarise, Mortgages.ie provide you with the following:

  • We provide the cheapest mortgage protection policies in Ireland.
  • We provide professional independent advice, to assist you in choosing a product suitable to your means
  • We provide a full comparison between the mortgage protection products offered by the major life companies in Ireland. 

 

A mortgage protection policy has the following features.

  • The premium is fixed for the duration of the policy
  • The primary benefit is the full repayment of the of the current balance on your mortgage. If you pass away, the insurer pays the benefits directly to a lender.
  • The premium is calculated by reference to age, mortgage amount, term and your medical history. The younger you are the cheaper the policy!
  • The level of mortgage protection cover reduces from year to year to track the reducing balance on your mortgage . Mortgage protection policies are sometimes referred to as 'reducing term insurance cover'.
  • A mortgage protection policy is not a statutory requirement if you are older than 50 when you take out your mortgage. However a lender may still require that such a policy is taken out before they will approve an application.
  • Serious illness cover is available as an option with most mortgage protection policies.The level of cover can be for the full amount of the outstanding mortgage, or it may be a percentage of the balance. Serious illness insurance gets very expensive as you get older.
  • In general, even if you are over 50, we recommend taking out a mortgage policy to clear the mortgage in the event of death..
  • We also strongly recommend taking out a mortgage protection policy to support residential investment property mortgages. If a mortgage protection policy is taken out on an investment property mortgage, it means that the mortgage will be cleared on death on the account holder and the investment property will pass to the beneficiaries of a will.

A standard life insurance policy may also be used as security for a mortgage . These policies are slightly more expensive, (see our quote calculator) but they have the following benefits:

  • The cover does not reduce over the term of the mortgage
  • It can be quite inexpensive to cover both first and second lives
  • You can add a conversion option, which allows you to extend the policy term in the future without having to provide updated medical evidence.This is avery valuable benefit if you have an illness that would potentially result in a refusal or loading ona life insurance application at a future date.( For example imagine a situation where you take out a 25 year life insurance policy for €250,000 and you suffer a serious illness on year 15 and are concerned that your life insurance will cease in ten years as you find yourself unable to arrange new cover due to the illness. If you had taken out a convertible life insurance policy you would be able to extend the life of your policy for a further 25 years without any medical evidence.)
  • You can inflation proof your life insurance policy through availing of an indexation option.
  • You may be able to use the policy as security for another mortgage in the future.

Adding serious illness cover or taking out Income protection insurance.

Adding serious illness to a mortgage protection policy might look expensive at the outset but it can look very good value if you are struck down with a serious illness in the future

You may also want to consider income protection, which is an insurance policy to ensure your income continues in the event of an accident or illness.

Conclusion

Mortgage protection pays off your mortgage if you die.

It is the cheapest form of life cover and the benefit reduces along with your mortgage balance.

It will not provide any additional cash lump sum for your family.

Warning

If your mortgage repayments are not maintained up to date, the mortgage will not reduce as quickly as anticipated and the related mortgage protection policy will not be sufficient to clear the mortgage.

For further information on mortgage protection including a comparison between the merits of life insurance versus mortgage protection policies, you may like to visit our dedicated life insurance site and our Mortgage protection area Life Insurance and Mortgage protection comparison tables