What is Mortgage Protection?
Mortgage protection is a type of insurance that provides financial security for your loved ones in case you die. It’s designed to help pay off your remaining mortgage if you pass away prematurely, making sure that your family can remain in their home without financial burden.
The insurance policy pays out a lump sum to cover the remaining balance on your mortgage, allowing your loved ones to retain ownership of the property.
What are the Benefits of Mortgage Protection Insurance?
- SUPPORT – Provides financial security for loved ones by paying off the mortgage in the event of the policyholder’s death.
- SECURITY – Ensures that family members can remain in their home without worrying about mortgage payments.
- VERSATILE – May include additional benefits such as coverage for critical illness or disability, depending on the policy.
- FLEXIBLE – Some policies offer flexibility by allowing policyholders to choose the coverage amount and duration that best fits their needs.
- AFFORDABLE – Mortgage protection premiums are usually inexpensive, making it an accessible option for homeowners.
How Much is the Average Cost for Mortgage Protection in Ireland?
The average cost of Mortgage Protection according to Emero is €29.55.
Lion.ie has a more concise and easy-to-digest breakdown at a glance. Visit their website HERE for a fun and far more informative blog post on the below.
***The above figures are for a dual life mortgage protection plan for 2 healthy, 38-year-old non-smokers borrowing €250,000 over 25 years.
***Mortgage protection directly with your bank may be FAR more expensive. Make sure to consult with a broker to get better deals.
Is Mortgage Protection Insurance Compulsory in Ireland?
Yes. You must take out a mortgage protection policy whenever you apply for a mortgage.
The Consumer Credit Act 1995 requires mortgage lenders to make sure that an insurance policy exists to cover the remaining mortgage balance, in case the borrower dies.
However, according to Emero, one of Ireland’s premier insurance providers, there are a few exceptions. These include:
- If the mortgage is for a property that is not the borrower’s principal private residence, life insurance is not needed.
- Mortgage protection is not mandatory if the borrower is over the age of 50 at the time of loan approval.
- If the insurance premium would be very high due to the borrower’s medical issues.
- The borrower already has enough life insurance to pay off the home loan if they die.
Do I Have to take out Mortgage Protection with my Bank?
The answer is No.
It is in your best interests to investigate the market and compare various providers. That way, you can find a provider that has both great coverage and a low premium.
You can also use insurance brokers to do the above work for you. A good broker can find you a great deal that can save you a lot of money in the future.
What is the Difference between Mortgage Protection and Life Insurance?
Even though they both provide a pay-out when you die, the beneficiaries are different.
In the case of Mortgage Protection, the lump sum is sent directly to your bank to pay off any outstanding mortgage.
In the case of life insurance, the lump sum is sent directly to your nominated beneficiary’s account.
Who Provides Mortgage Protection Insurance in Ireland?
Here are some main insurers:
- Aviva.ie
- Irishlife.ie
- Newireland.ie
- Royallondon.ie
- Zurich.ie
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