Mortgage Protection – Frequently Asked Questions
How much cover do I need?
You will need to ensure that you have covered the current outstanding balance on your mortgage, for the remaining term of your mortgage. The policy term must be whole years, covering all of the remaining loan period, so say you have 16 years and 3 months remaining, you need to apply for a 17-year policy term, however when 16 years and 3 months have passed you can cancel your new policy.
For new mortgages, you need to cover the amount you are borrowing over the term of your mortgage, i.e. if you are borrowing €280,000 over 25 years; then you will need cover for €280,000 over 25 years.
Beyond the minimum bank requirements described above, if you would also like to further protect your partner, spouse and or dependents under the same policy, as you don’t already have separate life cover, then in addition to covering the mortgage loan cover you should add an amount to help replace loss of income and opt for level cover.
What type of cover do I need?
The minimum type of cover you need depends on the type of mortgage you have. If you have a capital and interest mortgage, sometimes called an annuity loan, where the amount you owe reduces gradually; you need a Reducing Term – Life Insurance policy.
If your mortgage is “Interest Only”, where you are only paying the interest on the loan, then you need a Level Term – Life Insurance policy.
If you are seeking to protect your mortgage loan, but would also like to further protect your partner, spouse and or dependents under the same policy, as you don’t already have separate cover, then you should consider a Level Term – Life Insurance policy.”
Should I add optional Serious Illness Cover?
The answer is yes, you are four times more likely to get diagnosed with a serious illness before the age of 65, than you are to die, (Source: Zurich Life: Protecting you from the biggest risk you’ll face, pg.2). It’s also the cheapest way of having some level of serious illness cover in place which is always preferable.
With that said, It’s important to understand that adding serious illness cover to a Mortgage Protection policy means the cover is assigned to your bank, so if a claim occurred any benefit pay out would go to the bank and not directly to you. This would of course have the beneficial effect of reducing your mortgage repayments which would ease the financial burden of being seriously Ill. If considering adding serious illness, we would recommend speaking with one of our professional financial advisors, to help decide on which option is most suitable for you.
How long does my quote remain valid?
All quoted premiums assume standard medical acceptance and remain valid for 30 days, based on age each quarter.
When should I apply for cover?
If you already have your loan and are switching your mortgage protection policy, you should apply at least 2 weeks before your next policy direct debit, and if you have any medical conditions which may delay the new policy, apply at least 3-4 weeks beforehand.
If you are currently applying for a new mortgage, then you need to apply approximately 1 month before you want to draw down on your loan. If you have any health issues you may need to apply sooner.
How do I apply for cover?
Run your instant market comparison quote and complete and return your on-line application form, alternatively, call 01 845 0049, if your policy is needed urgently.
What start date should I put on my application?
If switching your policy, then enter a policy start date matching your existing policies next direct debit date.
If it’s for a new mortgage loan, then enter a policy start date corresponding to your intended loan draw down date. Don’t worry if your loan is delayed you can change this anytime.
Do I have to note the lenders/banks interest on the policy?
No, all lenders provide a simple form called a notice of assignment that you complete on receipt of your policy documents. Ulster Bank also write to the insurer on your behalf for an additional letter they require.
When will I receive my policy documents?
It normally takes a minimum of 3-5 working days from our date of receipt to have your policy ready, or 3-4 weeks, if you have any health issues. You enter your required policy start date on your application form and the earliest we can release your documents is 30 days prior to this start date.
How will I receive my policy documents?
Your original policy documents will be emailed or posted at your request. These originals should be given to your mortgage lender and the copy set you should retain for your own records. If you want the original set posted directly to your bank, just email us instruction with a name and email address.
What happens if a claim occurs?
If a life insurance claim occurs the proceeds of the policy automatically go to pay off the mortgage loan and the policy ceases. If there is any surplus left over, it would be paid tax free to that person’s estate. If a serious illness claim occurs, the benefit payment is made to the lender, if your chosen cover is equivalent to the mortgage loan amount the mortgage loan is cleared, if for a lesser amount then any balance remains outstanding on the mortgage loan and mortgage repayments will be reduced.
How do I ensure best value for money?
We compare all leading mortgage protection insurance providers in Ireland, to ensure the best cover at the best market price. When you run your quote, our website will display not only the best price, but also the merits of the recommended insurer and the recommended product. Our qualified independent advisors, are also at hand to answer any questions and to make sure you choose a product that best suits your personal circumstances and budget. Policies offered are free from premium reviews and our “best value guarantee” means we refuse to be beaten on price.