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Buying Mortgage Protection? Be Careful!

May 5 2017 4 min read Blog Mortgage Protection

 

All mortgage protection is the same – just buy the cheapest!

This is the usual claptrap you hear when you ask your “financially savvy” friend about buying mortgage protection.

What if he said all smartphones are the same or all handbags are the same, would you believe him?

Sure, all smartphones take calls, make calls, access the Internet while all handbags do eh…handbaggy stuff but there’s a world of difference between a cheap one and a designer one.

Don’t believe me…ask my wife!

It’s the same with buying mortgage protection policies, yes they should all clear your mortgage on death but there are major differences between the policies on offer from different insurance companies.

Ask yourself these three questions:

1) Will my full mortgage be cleared?

If your mortgage interest rate ever exceeds 6% then the vast majority of mortgage protection policies will not clear your mortgage.

When buying mortgage protection make sure the interest rate on your mortgage protection policy is higher than the current interest rate on your mortgage.

2) Will my policy pay out on both deaths?

If you are buying a joint mortgage protection policy with your spouse or partner, what happens if both of you die during the policy term? Will your policy pay out twice?

Most mortgage protection policies will only pay out on the first death i.e they are on a joint life basis.

One of our insurers offers dual mortgage protection. This will pay out on both deaths so effectively you’re getting double the amount of cover compared with a joint life policy.

Double mortgage protection is especially important if you have children.

3) I need to go interest only on my mortgage – what happens?

If, at any time in the future, you find yourself under financial pressure and need to go interest only on your mortgage, your lender will insist on you taking out a new life insurance policy.

But what if you have health issues and can’t get a new life insurance policy?

Answer – The bank will decline your interest only application.

Luckily one of our insurers offer a solution to this problem.

You can convert your current mortgage protection policy into a life insurance policy at any time without answering any medical questions.

Conclusion : Buying Mortgage Protection

Don’t be fooled by someone telling you all mortgage protection policies are the same.

Some insurers offer a much better policy than others.

Update – Free Waiver of Premium Benefit

One of our insurers is now offering waiver of premium for free!

If you’re disabled and can’t work for three months, your cover continues but you don’t have to pay for it.

It avoids horror stories where people lose their homes because the mortgage holder dies without mortgage protection because they couldn’t afford to keep up with their payments.

Usually waiver of premium adds 5% to the cost of your cover – not anymore – tis free!

Over to you…

If you’re in the market for mortgage protection, we’d be glad to help you.

Just like we’ve helped these lovely people.

Simply give me a quick outline of how I can help using the form below or call me personally on 05793 20836.

Chat you soon


Nick McGowan
lion.ie | making life insurance easier

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Blog Mortgage Protection
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