Mortgage Protection

Mortgage Protection2022-10-03T11:27:02+00:00

What is Mortgage Protection?

Whether you are nearing the end of a new property purchase (congratulations!) or simply looking to save money on an existing policy which you took out with one of the banks, you’ve come to the right place to secure a hugely discounted policy. We keep it very simple.

We quote you the absolute lowest quote we can offer first time and we think you’ll be very pleased with both the price and the standard of advice received. We pride ourselves on it.

You can also add Illness Cover to this type of plan which would pay all or a portion of the mortgage on the diagnoses of an illness covered by the plan.
For more information on Illness Cover please click here.

These are the essentials, but as I always say, you should not go ahead with any policy until speaking with an advisor to ensure it fits your requirements exactly. Feel free to call us at Quoteleader on 01 539 44 50 and speak to one of our expert advisors.

What is mortgage protection insurance?2021-04-27T08:06:33+00:00

Mortgage protection insurance is designed to pay off the outstanding balance on your mortgage in the event of death

Why do I need mortgage protection?2021-04-27T08:16:31+00:00

It is a compulsory requirement by Mortgage lenders that you take out mortgage protection or life insurance before you draw down your mortgage. This is because they want assurance that the loan will be fully paid off in the event of your death during the term of the mortgage.

If you die prematurely your plan can be used to:

  • Clear your mortgage
  • Secure ownership of your home for your family
Can I switch my mortgage protection policy?2021-04-27T08:21:09+00:00

Yes, you can switch your policy at any time. Mortgage protection premiums have decreased considerably over the last five to 10 years, to ensure you are not overpaying on your existing policy we recommend that you enquire on the current rates through QuoteLeader’s quotation page.

­Switching involves completing a new ­application (health) form, and there may be a GP’s report or a medical ­examination, depending on the level of cover involved. For most people, this is straightforward and could potentially save you thousands over the course of the policy.

We strongly recommend that you do not cancel your existing policy until your new policy is in place, this is to ensure there is no gap in cover.

Do I have to take out mortgage protection through the bank I have my mortgage with?2021-04-27T08:20:48+00:00

No, you are under no obligation to take out a mortgage protection policy with the same lender or bank that is providing your mortgage.

Banks and lenders will usually try to sell you their own mortgage protection prior to you drawing down your mortgage loan. What many people do not realise is that banks are tied to a sole life insurer, therefore they can only offer you one price for mortgage protection. At QuoteLeader we compare prices across multiple insurers to find the best value cover to suit your needs and in most cases, we are more competitively priced compared to the banks.

What does mortgage protection insurance cover?2021-04-27T08:22:50+00:00

In addition to paying off your mortgage in the event of your death, there are some additional features that are included in mortgage protection policies

Examples of automatic benefits that may differ from company to company include:

  • Guaranteed insurability: This is where you can increase the level of cover or extend the term following certain changes in your circumstances without giving additional medical evidence e.g. if you have a child, marry or buy a new house.
  • Accidental death: This provides temporary cover from when you submit your signed application and direct debit details, up until your application is approved or declined. If you were to die during this period, a lump sum would be paid out.
  • Children’s life cover: If your child dies during the policy term and is 3 months to 18 years old (or 21 if in education), a set amount will be paid, usually between €4,000 and €7,000.
  • Terminal illness cover: If you’re diagnosed with a terminal illness and have less than 12 months to live, payment in full will be made at that time.
  • Free Dual Life Cover is offered by some of the insurers
  • Free Second Medical opinion is offered by some of the insurers
  • One month free cover is offered by some of the insurers
How much will my mortgage protection cost per month?2021-04-27T08:19:25+00:00

The cost of mortgage protection will depend on several factors such as:

  • the size of your mortgage
  • your age
  • your health status
  • whether you want single life cover for just you, or joint life cover for you and your partner
  • the type of policy – reducing term or level term
  • where you buy your policy – a bank versus a broker like QuoteLeader
  • whether you are a smoker or non-smokers.
What add ons can you get?2021-04-27T08:24:57+00:00

The main add on with mortgage protection cover is serious illness cover, also known as specified illness or critical illness cover.

Serious illness cover

For serious illness cover you choose an amount up to 100% of your mortgage protection cover which can be paid out if you’re diagnosed with one of the illnesses listed in your policy document.

If you make a claim, your cover will reduce by the amount paid out, and any remaining balance would be paid if you later died during the term.

Please click here for a serious illness quotation.

Is there a difference between mortgage protection and life insurance?2021-04-27T08:25:27+00:00

Yes, Life insurance pays out a lump sum should you die during the term of the policy, but the sum normally remains the same. If the policy incudes indextation the sum can increase each year to help keep up with inflation.

With mortgage protection on the other hand the lump sum decreases each year to broadly match the outstanding balance on your mortgage. This means it tends to be cheaper than life insurance.

Another difference is that mortgage protection is designed to pay off your mortgage if you die, not to provide a cash sum to your dependants which is the main purpose of life insurance.

Can I use an existing life insurance policy for mortgage protection?2021-04-27T08:26:07+00:00

Yes, there is an option of using an existing life policy for mortgage protection by assigning it to your mortgage provider. This can work provided that the amount you’re insured for is at least equal to the value of your mortgage and it runs for the same term. If you die before the life insurance policy ends, the mortgage will be cleared, and the balance paid to your dependants.

The only downside to this is that should you die in the early years of the policy most of the sum insured will be assigned to the bank and there will be little to zero left over for your dependents. If you have a young family and wish to provide for them until they are 18 we recommend you take out a separate life policy and mortgage protection policy. Please speak to our advisors at QuoteLeader if you would like to discuss this further.

How can I compare the different mortgage protection policies in Ireland?2021-04-27T08:26:37+00:00

At QuoteLeader we will compare mortgage protection policies for you and discuss with you the different premiums that are available on the market across 5 different insurance companies. All you have to do is input your details such as your age, the amount of cover you want, and the term of the policy into our online quotation service and you will be presented with a quotation in seconds. We will also email you the results.

How is QuoteLeader premiums so competitive?2021-04-27T08:27:15+00:00

At QuoteLeader we love saving our customers money. Not only do we provide discounts on the existing insurance premiums  but we also sacrifice commission paid to us by the insurance companies so we can offer meaningful discounts on our mortgage protection policies. We love passing these benefits on to you our customers.

What are the types of mortgage protection insurance?2021-04-27T08:28:19+00:00

There are two main types of mortgage protection depending on your circumstances.

1.      Reducing term/decreasing cover

This is the most common and cheapest type of mortgage protection cover where the cover reduces over the term of the policy at the rate of interest you choose.

You should choose a rate that allows for increases in your mortgage rate, to ensure there’s enough cover to clear the balance.

How it works is that you pay the same amount each month with the amount of cover steadily decreasing until you pay off your mortgage.

If you die within the cover term the remaining mortgage balance at that time will 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.

2.      Level term cover

This is where the cover is for the full mortgage balance and does not reduce over time. So, whether a claim is made after one year or 21 years, the payout would be the same.

This is mostly suitable for interest only mortgages, where the capital doesn’t get paid off, only the interest of the loan – so the mortgage value stays the same.

A level term policy is typically more expensive than a reducing term policy because the cover does not decrease

What can I do to lower the premium of my existing mortgage protection?2021-04-27T08:29:08+00:00

Smokers can pay twice as much for life insurance than non-smokers. This is due to the many damaging health effects of cigarettes, but many people are not be aware of just how sizeable the difference can be between the premiums charged.

If you were a smoker when you took out your mortgage protection policy but you have not smoked in the last 12 months including the use of e-cigarettes and nicotine replacement products such as patches or chewing gum, then you can request to be re-categorised as a non-smoker. There must also be an intention to continue to abstain in the future, please speak to our advisors at QuoteLeader on how to best proceed with getting a new, updated quotation based on your current lifestyle factors.

In addition to smoking your BMI at the time of taking out your policy will influence the premium you pay. Each insurance company takes a different approach to underwriting applications from people with weight issues. This means one insurer may increase your premium based on your age and BMI but you may receive standard rates when applying to a different insurer.

At QuoteLeader we will help you find the best insurer and if your BMI has decreased since you initially took out your existing policy we will help you get a more competitive quote based on your new BMI details.

What are the reasons for being declined mortgage protection?2021-05-15T13:38:18+00:00

A reason for being declined mortgage protection could be the disclosures on your health and application form. Whilst most conditions can be priced and accepted by the life companies, there are a small number of conditions which will typically be declined. These include the following:

  • A terminal illness diagnosis
  • A person with multiple risk factors such as obesity combined with smoking and severe heart disease or diabetes.
  • An applicant who has shown repeated episodes of self-harm
  • An applicant with very high levels of alcohol consumption or people who are diagnosed as alcoholics.
  • Gross obesity i.e. Body mass index or BMI over 45.
  • Where the applicant has a condition that is still under review and no diagnosis has yet been confirmed.
  • Travel to perceived dangerous locations e.g. currently Afghanistan and Syria are off limits.
  • Engaging in extreme sports although most sports are accepted with an additional premium.
What are the steps involved in taking out a protection policy?2021-04-27T08:30:25+00:00

Step 1 – Complete an application form with QuoteLeader

Step 2 – We submit your application to the insurer

Step 3 – If your case is straightforward you will be offered cover immediately.

If your case is a bit more complicated, for example if you have a pre-existing health condition the underwriters may request more information in the form of a questionnaire or a medical screening/medical report.

Once the underwriters receive all the additional information required, they will then either:

  1. accept you at the standard price
  2. offer cover with special terms
  3. postpone you
  4. decline you

An experienced insurance broker like QuoteLeader will be able to navigate for you the best insurers to approach to provide you with the best possible chance of getting the insurance cover you require.

QuoteLeader is a trading name of Northstar Financial Planning Ltd and is regulated by the Central Bank of Ireland and is registered in Ireland under company number 635508. Registered office : The Diamond, Carndonagh, Co.Donegal.