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- What Is Mortgage Protection Insurance?
- Do I Have to Buy Mortgage Protection From My Bank?
- What Is the Difference Between Getting Mortgage Protection Through a Bank and a Broker?
- Can I Save Money by Getting Mortgage Protection Through a Broker?
- Will Getting Mortgage Protection Through a Broker Delay My Mortgage Drawdown?
- How Can Emero Help With Mortgage Protection?
- Myth #1 – Life Insurance is too expensive
- Myth #2 – Insurance companies don’t pay out
- Myth #3 – I don’t need Life Insurance, I can save money instead
- Myth #4 – I have a Life Insurance policy through work
- Myth #5 – I have Mortgage Protection so I don’t need Life Insurance
- What should you do next?
Buying a home involves plenty of decisions. Between getting mortgage approval, organising a solicitor and preparing for the costs of moving, there can be a lot to think about before you finally get the keys.
One of those decisions is Mortgage Protection Insurance. Your bank will usually discuss it with you as part of the mortgage process, but you might be wondering whether you have to take the policy they offer.
The short answer is no. In Ireland, you can generally arrange Mortgage Protection through an insurance broker or another provider, provided the policy meets your lender’s requirements.
Understanding your options before choosing a policy can help you make a more informed decision about your cover, its cost and what is suitable for your circumstances.
What Is Mortgage Protection Insurance?
Mortgage Protection Insurance is a type of life insurance designed to help repay your outstanding mortgage if you die during the term of the policy, subject to the policy’s terms and conditions.
For most people taking out a mortgage on their home in Ireland, having Mortgage Protection in place is a requirement before the mortgage can be drawn down. Certain exceptions may apply, depending on your circumstances and the lender’s requirements.
Mortgage Protection is commonly arranged as a reducing-term policy. This means the amount of cover decreases over time broadly in line with the outstanding mortgage balance.
For example, if you take out a mortgage of €250,000 over 30 years, your Mortgage Protection would generally be arranged to reflect the amount borrowed and the mortgage term. The precise cover required will depend on your lender’s requirements and the policy you choose.
The purpose is to help ensure that the outstanding mortgage can be repaid if an insured person dies during the policy term, rather than leaving the mortgage repayments as a financial burden for their family or anyone else responsible for the loan.
Do I Have to Buy Mortgage Protection From My Bank?
No. You are generally free to arrange Mortgage Protection through a provider other than the bank giving you your mortgage.
Your bank may offer you a policy during the mortgage application process because it can be convenient to arrange everything in one place. However, you can explore alternatives through an insurance broker.
The important thing is that the policy you choose meets your mortgage lender’s requirements and that the necessary documentation is completed before drawdown.
You should not assume that the policy offered by your bank is automatically the most suitable option for you. Equally, an alternative policy is not automatically cheaper or better. It is worth comparing the options available to you before making a decision.
What Is the Difference Between Getting Mortgage Protection Through a Bank and a Broker?
The main difference is how you access and compare insurance options.
Getting Mortgage Protection through your bank
Your bank may offer Mortgage Protection as part of its mortgage application process. For some buyers, this can feel like the simplest option because they are already dealing with the bank about their mortgage.
However, you should understand which insurer is providing the policy, what cover is included and how much the premium will cost over time.
Getting Mortgage Protection through an insurance broker
An insurance broker can help you explore policies from a range of insurance providers, depending on the broker’s arrangements with those providers.
Rather than looking at just one option, you can compare available policies and discuss differences in premiums, cover and policy features.
A broker can also help explain the application process, including any medical questions or additional information an insurer may require.
At Emero, we take a personal approach to helping you understand your options. We aim to make the process clearer, explain the choices available and help you consider cover that suits your circumstances and meets your lender’s requirements.
Can I Save Money by Getting Mortgage Protection Through a Broker?
It is possible, but it depends on your circumstances and the policies available to you.
Mortgage Protection premiums can vary between providers. Factors such as your age, health, smoking status, mortgage amount, policy term and the type of cover you require can all affect the cost.
Comparing options may help you find a policy with a more suitable premium or features for your needs. However, you should compare like with like rather than choosing a policy on price alone.
When reviewing quotes, consider:
The monthly premium: How much will you pay for the cover?
The level and term of cover: Does it meet your mortgage lender’s requirements?
The type of policy: Is the cover reducing, level, single-life, joint-life or dual-life?
Additional benefits: Are there optional benefits available that are relevant to your circumstances?
The policy conditions: Are there exclusions, limitations or other terms you need to understand?
It is also worth considering the longer-term cost. Mortgage Protection is often arranged for many years, so even a relatively small difference in monthly premiums can add up over the term of a policy. Just remember that the premium and terms offered will depend on your individual circumstances and the insurer.
Will Getting Mortgage Protection Through a Broker Delay My Mortgage Drawdown?
Not necessarily. Arranging cover through a broker does not automatically mean your mortgage drawdown will be delayed.
However, the time required to put a policy in place can vary. Insurers may need to review your application, ask medical questions or request additional information before making a decision.
Once your policy is accepted, the required documentation and assignment arrangements must also be completed in line with your lender’s process.
If you have a planned drawdown date, it is sensible to start arranging Mortgage Protection early rather than leaving it until the last minute. This gives you more time to explore your options and deal with any questions that arise during the application.
If your drawdown date is approaching, let your broker know so they can help you understand the steps that still need to be completed.
What If I Have Already Arranged Mortgage Protection Through My Bank?
If you have already taken out Mortgage Protection through your bank, you do not necessarily need to keep it without reviewing your options.
You may be able to explore alternative cover, but it is important to understand the implications before making any changes.
Before replacing an existing policy, check that the alternative cover has been accepted, that it meets your lender’s requirements and that all necessary documentation has been completed. Do not cancel your existing policy until you have confirmed that replacement cover is in place and suitable for your circumstances.
If you are considering switching your mortgage to another lender, increasing your borrowing or changing the mortgage term, it is also worth reviewing whether your existing policy still meets your needs and the new lender’s requirements.
An adviser can help you understand the options available before you make a decision.
How Can Emero Help With Mortgage Protection?
Buying a home can be stressful enough without feeling unsure about the insurance you need to arrange.
At Emero, we believe that choosing Mortgage Protection should involve more than simply accepting the first option presented to you.
Our advisers take the time to understand your circumstances, explain the options available and help you compare policies from a range of providers. We can also help you understand the application process and the requirements that need to be met before your mortgage drawdown.
Whether you are a first-time buyer, moving home or reviewing your options, we are here to help you make an informed decision about your protection.
You do not have to navigate the process alone.
Have a question about Mortgage Protection?
If you are buying a home and want to understand your options, speak to an Emero adviser.
You can explore Mortgage Protection options and request a quote through our website.
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