Mortgage Protection

Mortgage Protection is life insurance designed to pay off your mortgage lender, it can also include optional serious illness cover, as well as optional family cover. Our on-line quote calculator provides the cheapest instant mortgage protection insurance quotes in Ireland.

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We make arranging your Mortgage Protection Insurance easy and much more affordable, with up to 33% market savings!

Onequote.ie instantly compares Mortgage Protection insurance quotes from all of Ireland’s leading insurers, including; Aviva, Friends First, Irish Life, New Ireland, Royal London and Zurich Life to guarantee you the lowest price available on the Irish market.

Choosing the Right Mortgage Protection Policy

Types of Mortgage Protection Insurance

The phrase Mortgage Protection most commonly refers to “reducing term life insurance”. The policy has a term (in whole years) to cover your mortgage loan term and the cover reduces, as the balance on your mortgage loan decreases.

The price remains fixed and is lower than and other form of life insurance, as it already factors in the fact that the cover reduces over time.

That said, any life insurance policy that is assigned to a mortgage lender against a mortgage loan, is in effect a mortgage protection policy.

The minimum lender requirement for a standard capital and interest repayment mortgage is for reducing term life insurance to cover your mortgage loan, but you should consider each of the following Mortgage Protection policy options against your own personal requirements and budget:

  1. Reducing term life insurance – Mortgage Protection
    This represents the cheapest form of mortgage protection insurance, the life insurance is arranged to match your mortgage loan term, with the life cover reducing in-line with the outstanding mortgage loan. This type of policy is best suited to first time buyers without dependants, those restricted by budget, or for people who have dependants, but already have separate and adequate personal life insurance in place.
  2. Reducing term life insurance with accelerated serious illness – Mortgage Protection
    The same as the policy described above, but with serious illness insurance cover included. The serious illness cover must act a a percentage of the life cover and can be anywhere between 10% and 100%. This policy type is best suited to first time buyers, who can afford to add this additional protection, or to people who need mortgage protection life insurance and don’t already have any serious illness cover in place.
  3. Level term life insurance – Mortgage Protection
    Level cover as the name suggests, means that the cover stays level and this type of policy is a requirement for an interest only mortgage loan. It also however, deserves consideration by anyone with dependants who needs and can afford additional separate life cover. As with any mortgage protection policy, the bank is paid off in the first instance, but any balance of life cover would then be payable to the deceased’s family.
  4. Level term life insurance with accelerated serious illness – Mortgage Protection
    The same as the level cover mortgage protection policy described above, but with serious illness insurance cover included. This policy type is best suited to first time buyers who can afford to add this additional projection, or to people who need mortgage protection life insurance and don’t already have adequate life and serious illness cover in place.

Continuation Option

No matter which mortgage protection cover basis you choose, you should consider including a Conversion Option as this valuable option provides the following advantages:

During your policy term for both decreasing and level cover policy types: Should your financial circumstances change, it allows you extend the term of cover in line which an extended mortgage term, or convert from a decreasing term policy to a level term policy, to match an interest only mortgage.

Towards the end of your policy term – for level term cover only: Allows you to take back full policy ownership of your insurance policy form the bank, once your loan is cleared. This way you can continue to protect your dependants, while maintaining best value for money and the same health rates as originally granted.

Mortgage Protection Policy Examples

Mortgage Protection Policy Examples

Example 1: Reducing term life insurance cover
David & Elaine have a standard repayment mortgage of €240,000 over a 25-year loan term. Their bank requires them to have a Mortgage Protection plan for €240,000 over 25 years. In year 12 of the mortgage, David has a sudden severe heart attack and dies. The current level of cover on the mortgage protection plan is €120,000. Similarly, the outstanding mortgage has reduced to circa €120,000. A claim is made on the life insurance policy and the lump sum is paid directly to the lender to clear the mortgage.
Example 2: Reducing term life insurance cover with accelerated serious illness
John & Claire have a standard repayment mortgage of €280,000 over a 20-year loan term. Their bank requires that they have a Mortgage Protection plan for €280,000 over 20 years. They decide to include serious illness and pay an additional premium for this benefit. Should John, or Claire suffer a defined serious illness, then the insurer would make the serious illness claim payment to the bank. It’s worth noting that you do not have to have your whole mortgage loan covered for serious illness. It can be expensive, but even having half, or a percentage of your mortgage covered can give you that extra peace of mind.
Example 3: Level life insurance cover
Mike & Diane have a standard mortgage of €180,000 over a 22-year loan term. Their bank requires that they have a Mortgage Protection plan for €180,000 over 22 years. They have a young child, but don’t have any other life insurance in place to replace the lost income that would be needed to support the family, even with the mortgage paid off. They decide to pay a higher premium for level insurance cover, which means any balance of life insurance cover beyond the outstanding mortgage loan would go to the deceased’s estate and not the bank. In addition, because they included a continuation on their policy, they can take back full ownership of the policy benefits once their mortgage is cleared and choose to extend cover into old age, without having to provide any new medical information at the time.
Example 4: Level life insurance cover with accelerated serious illness
Jack & Mary have a mortgage of €320,000 over a 16-year loan term. Their bank requires that they maintain a Mortgage Protection plan for €320,000 over 16 years. They both work and have 2 children, but they only have a small separate life insurance policy on Jack and don’t have any serious illness cover in place. They decide to pay a higher premium for level insurance cover, which includes accelerated serious illness benefit of 50% of the life cover amount. This means that should either party suffer a defined serious illness, part of the claim pay-out would go to the bank and any balance would be payable to the claimant directly. Similarly, should a death claim occur during the term of the policy, any balance of life insurance cover beyond the outstanding mortgage loan would go to the deceased’s family and not the bank.

Bank Assignment Process

Mortgage Protection Policy Assignment

1. You confirm your required policy start date.
2. One Quote email you the “Policy Certificate“.
3. You complete your banks “Notice of Assignment” based on your policy certificate details.
4. Your bank sends the completed Notice of Assignment to the insurance company to have their interest noted.

Switching Mortgage Protection

Switching Mortgage Protection Provider

Switching mortgage protection can save you thousands over your policy term and OneQuote.ie help to make the switching process simple, we even give you the first month free, to ensure no payment overlap occurs.

Switching in 3 simple steps:

  1. Run your discounted quote and apply online, or by phone.
  2. Start your new new policy, as soon as it’s processed and get the first month free.
  3. Hand your new policy document over the your bank, sign their “Assignment Notice” and tell them to cancel the old policy.

Mortgage Repayments Protection

Mortgage Repayments Protector

Whereas Mortgage Protection is life insurance designed to clear your mortgage loan in full, but what about keeping up your mortgage loan repayments if you get ill or have an accident and can’t work?

Mortgage Repayments Protector is a form of insurance designed to specifically cover your regular mortgage loan repayments, if you were out of work due to an any illness, accident, or disability keeping you out of work.

The cover amount directly relates to your mortgage loan repayments and it is set up for the term of your mortgage loan. Also, a very nice feature, is that you get tax relief on the premiums, keeping the cost down!

If you need more information on Mortgage Repayments Protector, enquire here or call us on: 01 845 0049.

 

Top 5 Most Common Mortgage Protection Questions, full FAQ’s above!

Do I need to mention my lender/bank on my application form?

No, all lenders provide a simple form called a “notice of assignment” that you complete on receipt of your policy documents. Your bank then notes their interest using this completed assignment form.

Does my premium remain fixed?

Where you have chosen a standard Mortgage Protection reducing cover policy, the discounted premium quoted already takes into account of the fact that the cover will reduce alongside your mortgage loan.  If you want to see the cost of non-reducing cover, run a level quote to compare the difference.

The price of standard reducing mortgage protection and level mortgage protection is always fixed for the full mortgage loan term.

How do I switch Mortgage Protection?

Simply return your completed application form, emailed to you as soon as you run your quote. The once you have received your new policy certificate hand it to your bank and sign their notice of assignment. Your bank will then cancel your old policy and as we give you the first month free, there is no payment overlap.

Once I return my application, how long does it take?

Processing your application normally takes a minimum of 24 hours from our date of receipt, or up to 3 weeks, but only if you have  long term health issues, that may require medical reports. Once you return your application we will call us to discuss this.

You can also apply now and hold for later start date, if a new mortgage loan and you have not yet got your draw down date.

What start date should I put on my application form?

If switching your policy, then enter a policy start date matching your existing policies next direct debit date, but return your application at least 1 week before this 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, or if you don’t know it yet just put TBA (to be advised).

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