Protection

What is Mortgage Protection

Mortgage protection insurance is a type of life insurance required when taking out a mortgage. It lasts for the length of the mortgage and pays off the outstanding loan balance if the borrower dies during that term. Unlike regular life insurance, mortgage protection insurance covers the full loan amount borrowed, also called the sum assured.

With life insurance, the full sum assured is paid to your beneficiaries upon your death, whereas mortgage protection pays your outstanding loan balance to the bank first, and any remaining funds are then sent to your beneficiaries.

Do you need mortgage protection in Ireland?

To obtain a mortgage, mortgage protection is required by the lender. The lender must ensure that you have enough insurance coverage in place to cover the full value of the loan.
It also gives you peace of mind knowing that your dependents can continue living in your home without the financial burden of paying the mortgage.
You can apply for mortgage protection insurance if you’re aged between 18 and 74.

Types of mortgage protection insurance

There are two main types of mortgage protection and which one you need will depend on your circumstances. Here are the two types and why you might choose them:

1. Reducing term cover

- With reducing or decreasing term cover, the cover reduces at the rate of interest you choose.
- You pay the same amount each month but the amount of cover steadily decreases as you pay off your mortgage.
- If a claim is made, the remaining mortgage balance at that time should be paid off.
- This type of cover is suitable for repayment mortgages, where you pay off the interest and capital of the loan over a set period. At the end of the term the mortgage is completely paid off and your cover has reduced to zero.
- You should choose a rate that allows for increases in your mortgage rate, to ensure there’s enough cover to clear the balance.

2. Level term cover

Level term cover is for the full mortgage balance and doesn’t reduce over time. So, whether a claim is made after one year or 21 years, the payout would be the same.
This is suitable for where the capital doesn’t get paid off, only the interest of the loan – so the mortgage value stays the same.

Protection solutions

Income Protection

Income protection is an insurance plan whereby you agree to make a monthly payment to an Insurance Company in return for a regular monthly income if you cannot work as a result of an illness or injury after a certain period of time. Benefits paid are less any State benefits or other income protection plans. You can take out income protection if you are in full-time work or are self-employed and earn an income. It protects you only in these circumstances – it will not be paid if you become unemployed. The cost of the policy depends on your age, Income, health, occupation and the benefits you choose. Payments on your plan are eligible for tax relief at your marginal rate of tax.

Critical Illness Cover

Critical illness insurance is an insurance plan where you agree to make a monthly payment to an Insurance Company in return for a tax free lump free should you suffer from one of a number of critical illnesses specified within the plan you take. Protecting your family with life assurance is one of the most important financial decisions you can make. This will help to maintain their standard of living whilst you are unable to earn an income.

Protection

The purpose of Protection Cover is to provide a lump sum payment in the event of death and/or the earlier diagnosis of a specified illness, as defined in the policy. The benefit payable depends on the protection option you have selected. All Protection Cover policies are regular premium contracts. For all protection policies (except Guaranteed Whole of Life), you select a term at the outset and pay premiums over the term of the contract. Cover is provided for the full term. We offer products such as Level Term Assurance, Convertible Term Assurance, Whole of Life Cover and Mortgage Protection.

Life Cover

Life Cover is an insurance plan where you agree to make a monthly payment to an Insurance Company in return for a tax fee lump sum payment should you die. Protecting your family with life assurance is one of the most important financial decisions you can make. This will help to maintain their standard of living in your absence.