When you are trying to take out a mortgage your lender will inform you that you will need term life insurance mortgage protection. When in fact these are two separate products. Both can be assigned to your lender to pay off your mortgage in the event of death of the policy holder. There are two main differences between term life insurance and mortgage protection. The first being price, where mortgage protection is cheaper than term life insurance. The second being that mortgage protection cover amount reduces in line with your mortgage. This means that even though term life cover is slightly more expensive, it won’t decrease in line with your mortgage.
For example: You take a mortgage at €300,000 for 30 years and a €300,000 term life insurance policy assigned to the mortgage. In 10 years €100,000 is paid off the mortgage. If you pass away, €200,000 is paid to the lender clearing your mortgage and €100,000 is paid to your family. Making it almost as good as having two separate policies.
Mortgage Protection – Comparing Term Life Insurance and Mortgage Protection
One of the most valuable assets is your home. It only makes sense to protect it as much as you possibly can. A term life insurance policy assigned to your lender or mortgage protection policy pays off your mortgages outstanding balance in the event of death. With either of these policies in place it will provide peace of mind for you and your loved ones so they can continue with their current lifestyle.
Mortgage Protection is a form of life assurance that is compulsory in Ireland when taking out a mortgage on your primary residence (family home). Term life insurance and mortgage protection can cost as little as €10 per month. Choosing the right policy for you is an essential stepping stone in protecting your home and family.
Did you know you are able to save up to 30% by taking out term life insurance or mortgage protection through lowquotes.ie? You can simply apply online, it’s quick and easy. By using our online digital services, you can get your required documents sent to your lender with a single click. Our advisors here at LowQuotes will dedicate their time to get you the best possible policy. We compare the market so you won’t have to. Emergency cover can be arranged within 15 minutes.
Mortgage Protection Types of Cover – Comparing Term Life Insurance and Mortgage Protection
Single :
Getting a mortgage by yourself and taking out a single policy.
Joint :
This policy covers both you and your partner and will pay out in the instance that one policyholder passes away.
Dual :
Dual cover will continue to pay out after the death of the first policyholder and will continue to pay out after the passing of the second policyholder to the family of the deceased. We recommend this over joint as it comes free of charge.
Mortgage Protection Example Calculation:
Let’s say you purchase a new home for €300,000 and you have a 10% deposit.
Your total mortgage is €270,000 over 30 years say.
A policy needs to cover the amount of €270,000 over the 30 year term of the mortgage.
In the event of loss of life of the insure in year 1, €270,000 will be paid out. The cover decreases each year at a rate of your mortgage.
Mortgage Protection, who is it for and when is the right time to apply?
Everyone who owns or is planning on owning a home in Ireland must take out a mortgage protection policy or a term life insurance policy assigned to the lender.
Applying for a policy as soon as possible can and will always be beneficial to you because:
- It will allow time for insurance companies to underwrite your policy in time to drawdown your mortgage
- Previous medical history can delay acceptance. In some cases life companies can decline to offer cover, finding this out early will give you the best possible chance to obtain adequate cover in time to drawdown your mortgage
Additional Benefits of Term life Insurance & Mortgage Protection
With either of these policies you have the opportunity to avail of many additional benefits. Individual companies all offer various benefits. Our advise will always be to speak to a financial advisor before taking out cover. Your mortgage protection policy depends on how much you want out of it. We match these various benefits to your individual needs, making sure you get the best outcome!
Some of the optional benefits for both term life insurance and mortgage protection are as follows:
- Specified Illness Cover
Specified illness can be included in your mortgage protection cover in this instance clearing your mortgage in the same way that life cover would in the event of a claim for a covered illness.
- Children Specified Illness Cover
Specified illnesses benefit for children up to the age of 25 if in full time education.
- Child Life cover
It is applicable for children who are aged 30 days and older and under the age of 21 ( 25 if in full time education)
- Terminal Illness Benefit
Life cover payment made if diagnosed with terminal illness, as long as there is 12 months to go until the termination of the policy.
- Guaranteed Insurability
When a client increases their mortgage or in the process of extending their term for instance to a longer date . They can use this option to meet their cover needs.
- Medical 2nd Opinion
Best Doctors Second Medical Opinion (Aviva). Helping Hand (Royal London)
- Aviva Family Care
Unique to Aviva , it offers a completely confidential mental health support services providing clients with quick access to professional advise from qualified therapists.
Who do I choose for Term Life Insurance or Mortgage Protection?
We have access to every life insurance company on the market allowing us to get you the most suitable and most competitively priced policy on the entire market. These companies extend to Zurich, Aviva, Royal London, and New Ireland. Our award winner financial advisors are here to help you through the whole process. Ensuring you that you are choosing the absolute best policy for you, all at the cheapest price on the market. Apply online or give us a call.
