What’s a Convertible Mortgage Protection Policy?

Mortgage Protection plans may appear to be the same.

They’re not.

Certain plans can give you a lot more for your money and also safeguard your  ability to get future cover, even if you later suffer ill health.

Having a Convertible Mortgage Protection Policy can make a significant difference and offers you even greater flexibility, benefits and value for money. The real value of Convertible Mortgage Protection is that it offers you the flexibility to

• extend the term of cover
• convert from a mortgage protection  to a life insurance policy
• or take out a new policy on similar terms without being medically assessed.

Essentially, it protects your ability to get future cover to meet your changing needs irrespective of your health at that time.

Mortgage Protection Case Study 1

Tom and Kate buy their first home and take out a Convertible Mortgage Protection Policy for €300,000 over 20 years. Five years later, Tom and Kate get into financial difficulty and want to reduce their monthly mortgage repayments to ease financial pressure.

As Tom and Kate selected a conversion option when they took out their mortgage protection policy, this gives them the flexibility to:

• extend the term of cover on their existing policy to match the extended mortgage term;
• convert from a decreasing term to a level term policy to match an interest only mortgage.

Mortgage Protection Case Study 2

Billy and Laura buy their first home and take out a Convertible Mortgage Protection Policy for €300,000
over 20 years. Five years later, on the birth of their 2nd child, they want to move to a bigger home but Billy has developed an illness e.g. diabetes.

As Billy and Laura have the conversion option in place this means they won’t have to pay significantly higher premiums or be declined for future cover and be unable to move to a bigger home because of a deterioration in health.

By having the conversion option in place, this removes the risk.

As Billy and Laura selected a conversion option when they took out their mortgage protection policy,
together with the Life Events Option, this gives them the flexibility to:

• extend the term of cover by a further 10 years to match the extended mortgage term and increase their mortgage cover to €350,000
• convert from a decreasing term to a level term policy thereby increasing their level of personal cover.

Where Can I Buy Convertible Mortgage Protection?

New Ireland are the only insurer to offer convertible mortgage protection. To price it simply get a mortgage protection quote and add 10% to the cheapest price.

READ MORE ABOUT MORTGAGE PROTECTION

If you have any questions on mortgage protection as a first time buyer or if you are shopping around your current cover, please feel free to contact us using the form below.

Thanks for stopping by.

Nick & The LION.ie Team