Mortgage protection is the most cost effect form of life assurance and is used most widely to protect both the borrower and the bank against the risk of the borrower dying within the term of the mortgage.
It is cost effective as the amount of life cover that is paid out is matched to the amount outstanding on the mortgage always. So as the mortgage decreases, so does the life cover that is attached.
A mortgage provider will almost always ask that you have a policy like this to protect themselves before they will agree to allow you to draw down your mortgage. They will insist that the are the first ones to receive the benefit in the event of your death. They can offer to help with this, but you are entitled to shop around and obtain the best policy in the market. There is no guarantee that the bank is doing this for you.
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Why should I deal with ucompare.ie instead of my bank?
We have access to all 6 mortgage protection providers in the Irish market, providing you with independent fair analysis of the market. A bank is a tied agent to just 1 of the protection providers in Ireland. There is no assurance that you are getting the best price or the best product.
What is Mortgage Protection
Mortgage protection is basic life cover that covers the cost of your mortgage in the event of death. It is set up on a decreasing basis which mean that the amount of cover will decrease over the term in line with the amount outstanding on your mortgage. Because of this, is cheaper than term insurance.
Why is Mortgage Protection cheaper than ordinary Life Insurance?
Mortgage protection decreases in line with your mortgage therefore each year there is less cover needed so the premium is cheaper. This differs from ‘Level Term Insurance’ where the benefit remains level.
Is Mortgage Protection Insurance suitable for interest only mortgages?
If you have an interest only mortgage you should be taking out level term assurance. Interest only mortgages do not decrease as there is no capital being paid off. If you have revert to interest only midway through your mortgage, you can now convert your mortgage protection into the type of insurance that is needed to cover it from that point. This is a relatively new feature available on mortgage protection.