Mortgage Protection
Get a Quote
Mortgage Protection
Mortgage Protection can ensure that your loved ones are not burdened with the responsibility of paying off your mortgage in the event of your death. The decreasing cover amount aligns with the decreasing outstanding balance of your loan, providing sufficient coverage to clear the remaining debt.
Mortgage Protection can be set up on a single life basis, where only one person is insured, or on a dual life basis, where both you and your partner are insured. The choice between single or dual life depends on your specific circumstances and needs.
It is important to note that Mortgage Protection is different from traditional life insurance policies, where the cover amount remains constant throughout the policy term. This type of policy is specifically designed to meet the financial needs associated with a mortgage or other loans that have a decreasing outstanding balance.
Overall, Mortgage Protection provides peace of mind by ensuring that your loved ones are not burdened with your mortgage debt in the unfortunate event of your death.
Example:
John is drawing down on a mortgage of €300,000, over a 25 year term. His lender has asked him to set up a life insurance policy to cover the outstanding balance of his loan in the event of his death. John takes out a Mortgage Protection policy that offers initial life cover of €300,000, also over a 25 year term.
In 10 years time, John dies. The balance on his mortgage is €200,000. The cover amount on his Mortgage Protection is now also €200,000. The insurance company pay the lump sum of €200,000 to his lender, to be used against his outstanding loan. The mortgage is therefore cleared.
Tips:
You can review/change your mortgage protection at any time.
Check to see if your life insurance is “assigned” to a lender. This means that they will have first call on any claim.
You can add Serious Illness cover to your Mortgage Protection so that a lump sum is available in the event of diagnosis of a critical illness*.
*As specified in the policy conditions.
Level Term / Family Financial Protection
Level Term is a type of life insurance where the cover amount and the premium remain fixed for the duration of the policy.
It is set up on a long-term basis, usually 20-30 years.
This can be set up on a single or a dual life basis.
This type of policy is most suited to providing financial protection for your family and to cover funeral expenses.
A number of additional benefits can be added to this type of life insurance:
Serious Illness Cover
This provides a lump sum if you are diagnosed with a critical illness (as specified in the policy conditions).
Hospital Cash
This provides funds if you are admitted to hospital for an extended period, (usually exceeding 72 hours)
Surgical Cash
This will pay a lump sum if you have to undergo surgery.
Example:
Mary and Mark were married and set up a life insurance policy for €250,000 each with standalone Serious Illness cover of €100,000 each.
Unfortunately, Mary suffered a heart attack and once this had been confirmed by a doctor, €100,000 was paid to her. Mary was no longer able to work so this money went towards paying the mortgage, childcare costs and increased medical expenses (including fuel costs, hospital car parking fees, food on days she had to travel to a specialist etc.).
A few months later, Mary sadly passed away and €250,000 was paid to Mark.
Mark’s life and illness cover is unaffected and he, or his family, can still claim if something happened him before the end of the policy term.
Mark used this money to cover the funeral costs, sets some aside for a college fund for their two children, and takes a year off work while he is dealing with this very difficult time. He does not have to worry about where the money will come from to pay the electricity bill, buy the weekly groceries, or pay for increased childcare now that he is a single parent.
Without this insurance policy, Mark’s life, and his children’s would look very different.
Tips:
Check if the Illness cover on your policy is standalone or accelerated.
Make sure your cover amount is high enough to provide a replacement income for your family on your death.
Check your life insurance policy to see if it is level/fixed or decreasing.