Compare Mortgage Protection Insurance
Consider Your Needs
In Ireland, a mortgage lenders minimum requirement is for a decreasing term life cover only policy, which will simply pay off your mortgage on the death of one policy owner if a one person mortgage or on either policy owner if a 2 person mortgage.
But with that said, it’s always wise to consider all your policy options to ensure that you secure the most suited and best value policy to meet your current and future needs. If 2 people you may prefer dual cover over joint cover and you may also want to add optional serious cover which can amount to any level up to the full mortgage loan amount.
Decreasing Term Cover
A decreasing term policy has a term (in whole years) to match your mortgage loan term and the cover reduces as the balance on your mortgage loan decreases. The price already takes into account that the cover will reduce and is fixed for the policy term. Decreasing term cover is cheaper than level term cover for the very reason that the cover reduces.
Level Term Cover
Whilst level term insurance is suited to interest-only mortgages, it can also be chosen for standard mortgage loans. With a level term policy as your mortgage loan decreases the sum assured (cover level) remains the same. This type of cover is a suitable choice if you want to leave your dependents with some extra funds, don’t already have additional family protection or you want to turn the policy into a long term plan through the use of a continuation option.
Mortgage Protection Insurance – Your Policy Options
Below we explain everything you need to know about mortgage protection insurance or “decreasing term cover” including the automatic and optional policy features and benefits.
The Policy Term
The term of your mortgage protection should match your mortgage loan term and must be expressed in whole years. If switching policy on an already existing mortgage the term of your policy should match your remaining loan term.
The Cover Level
The life cover level should match your new mortgage loan amount. If switching policy on an already existing mortgage, the cover level on your policy should match your remaining loan balance.
If wanting to include optional specified serious illness cover, you can choose any amount between 10% and 100% of your life cover amount.
The Cover Basis
Single cover – covers one person under the policy.
Joint cover – allows you to have 2 people on the one policy, but it only has 1 cover pay-out, on the first claim. Once a life cover claim payout occurs your mortgage is paid off and your cover ends.
Dual cover – allows for 2 people on the same policy, but provides pay-outs on both people, under separate claims. This means that once a life cover claim occurs the reaming benefits continue but at a reduced premium level.
The price is based on your age, smoker status, and your health. So, you will need to answer some medical questions when making an application. Once your policy commences, the price is always fixed, with a choice of monthly or annual premiums.
Mortgage Protection – Automatic Benefits & Features
Most insurers offer added benefits and features at no extra cost known as automatic cover, although in the case of free children’s cover and health evidence free cover increases their limits may differ.
- Accidental Death Benefit – A lump sum paid in the event of death caused by an accident, when the insurer is still processing your application.
- Terminal Illness Benefit – If you are diagnosed with a terminal illness your full life cover sum will be paid out.
- Children’s Life Cover – A lump sum benefit covering your children .
- Guaranteed Insurability – The ability to increase cover in line with an extended mortgage loan, without having to make a new mortgage protection application.
Mortgage Protection – Optional Features
Including a Conversion Option allows you to later extend your policy cover term or to convert from a decreasing term to a level term cover policy, should a switch to interest-only ever be necessitated or a need for additional family cover. Any changes made through a conversion option are free from fresh evidence of health, so it protects you against a decline in your health affecting your long term costs if a policy cover extension (beyond guaranteed insurability limits) or switch to level term cover is ever necessitated.
Mortgage Protection – Optional Benefits
Serious Illness Cover
You may also want to add specified serious illness cover to create a more comprehensive policy if so this additional cover can be used to pay off some or all of your mortgage if you are diagnosed with a specified illness listed on the policy. If choosing this optional added benefit, you don’t have to go for the full mortgage loan amount, unlike your life cover amount that needs to match your mortgage borrowings, serious illness cover can be anywhere between 10% and 100% of your mortgage loan amount.
In addition, if choosing optional serious illness cover, it is important to understand that any such claim payout will go directly to your mortgage lender to reduce your outstanding mortgage and not directly to you.