Mortgage Protection - A Quick Guide4 min read
The easiest explanation is that mortgage protection is a form of life insurance that compensates your mortgage lender in the event of your death. Not the nicest thought but necessary to consider! Even if you're not around, this policy makes sure your repayments are still met and that your mortgage gets paid off. Irish lenders insist you have this in place or they will not allow you to go through with your purchase. Once you have signed your legal contract, your mortgage protection is activated for drawdown and you will have your keys in no time!
One of the questions we regularly face when mortgage protection is mentioned is whether or not it’s best to purchase your policy with your own bank. While it might seem like the easiest option, the reality is that your bank does not guarantee you the best price. You are under no obligation to accept their offer. To find the best deal for you, it’s always a good idea to shop around and check out all the available options. Remember Lintil is here to help, we can put you in touch with our insurance partner and they will give you the best quote on the market.
If you are a single applicant, you only have to take out cover for yourself but if you have a joint application, both parties must be insured under the one plan.
Understandably, many people confuse these two policies. While life insurance is given to your next of kin/dependants in the case of a claim, mortgage protection is designed to simply cover the remainder of your mortgage. Mortgage protection is one of the cheaper life insurance policies as the price decreases as time goes on, as more mortgage repayments are made. It is different from life insurance which remains constant and may even increase over time. You can in fact request policies that encompass both.
If you are a single applicant, you only have to take out cover for yourself but if you have a joint application, both parties must be insured under the one plan. Be aware that if one of the applicants passes away, you can then claim your mortgage protection. Don’t forget this policy only covers you from death and not illness but other forms of life insurance can offer this.
Keep in mind your age, underlying health conditions and even smoking may impact your mortgage protection premium. For this reason, be sure to login to Lintil and we can set up a chat with our insurance partners who can find the best deal for you!