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Some tips on Mortgage Protection Insurance

Updated: Apr 5, 2023

Buying a home for the first time conjures up feelings of excitement and frustration The excitement comes from getting on the property ladder and being finally able to build a home of your own. However, this excitement is often tempered by the reality of paperwork, responsibility and debt.

During this busy time in a person's life, considering mortgage protection is often the furthest thing from the person's mind. Nevertheless, mortgage protection insurance is compulsory for almost all homebuyers in Ireland.

However, purchasing mortgage protection often becomes an afterthought, meaning buyers pay more than they should for their mortgage protection insurance.

As expert mortgage protection insurance brokers, citywide financial wants to give our blog readers some tips on making sure they get the best possible mortgage protection policy.


1. Type of Mortgage Protection

Suppose you are particularly new to the home buying journey. In that case, you may not be familiar with mortgage protection.

Mortgage protection insurance is a form of life insurance. In the unfortunate event that the mortgage holder passes away, mortgage protection covers the remaining balance of the debt.

There are different types of mortgage protection based on your unique circumstances:

Single Policy: Naturally enough, a singles policy is for individuals purchasing a home on their own.

Joint Policy: For homebuyers purchasing a property together, a joint policy pays off the remainder of a mortgage if one of the mortgage signatories passes away.

Duel Policy: A duel policy pays out if the first mortgage holder passes away and then pays out again if the second mortgage holder passes away. A dual policy is usually more expensive than a joint policy.


2. The best Mortgage Protection Insurers

The same lender that offers a mortgage will frequently provide a mortgage protection quote. While this is undoubtedly convenient, mortgage lenders are usually tied to one specific bank or financial institution. Therefore, they can only offer you one quote and won't compare the market. It's important to remember that just because you are getting a mortgage from a lender, doesn't mean you're under any obligation to purchase mortgage protection from this same institution.

We recommend using a mortgage broker to help find the right policy for you. Our team of mortgage insurance brokers liaise with all of Ireland's major insurance companies. We help clients get the right insurance for their needs.


3. Should you include Serious Illness Cover?

A standard mortgage insurance policy will pay off the mortgage in the event of a passing. However, it will not payout in the event of an illness. Suppose you or your partner develop a severe condition that prevents you from working. In that case, serious illness cover can be used to cover your mortgage. Serious illness cover is paid out as a lump sum if you are diagnosed with a specific illness before the mortgage is fully repaid. It's essential to remember serious illness cover is not a requirement; however, it adds additional peace of mind.


4. When to apply for Mortgage Protection

There is no set time to apply for mortgage protection insurance. But we highly recommend beginning this process as soon as possible. At Citywide Financial, we recommend applying anywhere from 4 to 6 weeks before your mortgage drawdown date.

If you have a specific medical issue, it's best to apply for mortgage protection even earlier. Individuals with a medical condition may need to provide extra documentation to complete their insurance application.


5. What is guaranteed insurability

Guaranteed insurability is an additional benefit available from insurance companies. In brief, guaranteed insurability means you can purchase additional insurance without undergoing new medical examinations to prove you are in good health.

Guaranteed insurability can be beneficial when seeking to purchase a second property.

Some restrictions and conditions come with guaranteed insurability, and we recommend discussing these with your insurance broker.

If you would like to discuss mortgage protection insurance in greater detail, please contact our mortgage brokers today. Our friendly, knowledgeable and professional team explain insurance policies in plain, straightforward English, empowering our clients to make the right decision for their unique circumstances. See our mortgage protection page for additional information.

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