A Mortgage Protection Policy in Ireland: Everything You Need to Know

“A Mortgage Protection Policy in Ireland: Everything You Need to Know”

Are you thinking about getting a mortgage for your new home? If so, it’s important to understand the importance of a mortgage protection policy and the options available to you. In this article, we’ll cover everything you need to know about mortgage protection policies. From the types of policies available to what happens to your policy if you decide to switch your mortgage.

Why Do You Need a Mortgage Protection Policy?

When applying for a mortgage to purchase your home, you are required to have a mortgage protection policy in place. This policy is designed to protect you in the event of your untimely death or, if selected, the diagnosis of a specified serious illness that leads to an inability to pay for your mortgage. By paying a monthly premium over a specified term, the policy will pay out a lump sum if the unexpected happens.

Types of Mortgage Protection Policies

There are different types of mortgage protection policies available, including reducing term cover and joint life first death cover. Reducing term cover decreases over the term of your mortgage in line with the capital outstanding. Joint life first death cover means the mortgage is paid off on the death of the first person to die if a couple is involved.

Bank vs. Broker: Mortgage Protection Options

When you draw down a mortgage from a bank, the lender will insist you take out your mortgage protection from their group scheme. This means you use the bank’s insurance provider. However, when a broker arranges your mortgage, they have access to multiple mortgage lenders and insurance providers. This ensures you have more options in finding you the best deal.

What Happens to Your Policy If You Decide to Change Your Mortgage?

If you decide to switch your mortgage to a different lender, you will have to assign your mortgage protection to your new lender. As well, If either the amount you borrow or the term of your mortgage changes, you may need to increase your mortgage protection cover to stay fully protected. If your current mortgage protection policy is through a bank’s group scheme, the bank will cancel your cover once you switch to a new lender. Before switching, make sure you can get mortgage protection cover elsewhere.

If you are in a position to pay off your mortgage early, you generally have two options. You can cancel the mortgage protection cover and pay no more, or you may choose to keep the mortgage protection policy and continue to pay for the additional benefits you opted for, such as life insurance or a level term cover with or without serious illness cover.

Additional Protection Products to Consider

Lenders will insist you have a mortgage protection policy in place before drawing down your mortgage. However, we cannot predict what life has in store, and therefore, it’s important to consider additional protection products from the outset. Serious illness benefit can be an optional add-on to a mortgage protection policy. This means your mortgage will be cleared and your home secured not only if you die, but if you are diagnosed, or recover from a serious illness specified in your policy. Another optional protection policy is income protection, which is insurance cover that provides you with a replacement income should an accident or sickness keep you out of work for an extended period of time. If affordable, it’s worth considering these options the younger you are, as premiums become more costly as you get older.

Mortgage and Life Broker Options

At Ezfees Financial, we understand that getting a mortgage and protecting your home can be a complicated and overwhelming process. That’s why we are here to help. After securing your mortgage, we then compare a number of mortgage protection policies from an optional number of insurers to make sure you get the most suitable protection policy for your needs and the best possible deal. Our expert advisors will talk you through and explain the difference in the various and additional protection products available and advise on the best option for you and your family’s needs.

So, why not give us a call on 0818 910800 or email your query to info@ezfeesfinancial.ie to speak to one of our experts and get the guidance and peace of mind you need to protect yourself and your loved ones.

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