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You’re buying your first home – congratulations!
So you’re looking for the best deal on first time buyer mortgage protection…
And asking yourself questions like
What’s the difference between mortgage protection and life insurance?
Which one should I buy?
Which company should I buy from?
I’m well aware how stressful buying your first home can be……I did it myself not too long ago.
So I’m here make arranging your mortgage life insurance a doddle.
Mortgage protection is a basic type of life insurance policy that pays off your mortgage should you due during the term of your mortgage.
Mortgage protection is a legal requirement for most Irish mortgages but there are 3 circumstances where the bank may, but is not obliged to waive the need for mortgage protection:
Mortgage Protection (or mortgage life assurance as the banks like to call it….just to confuse you)
First time buyer mortgage protection is a basic death policy that simply clears your outstanding mortgage should you die during the term of your policy.
It’s really there to make sure your debt to the bank is repaid if you die – that’s why they insist you take it out.
The amount of cover on a mortgage protection / mortgage life insurance policy reduces over time.
Say you’re getting a mortgage for €250,000 over 25 years.
Mortgage protection will never leave money to your partner or children, it just clears the debt you owe the bank.
If you have children you should also consider a life insurance policy to protect them from financial hardship.
Life Insurance
Life insurance or term life insurance or life assurance differs from first time buyer mortgage protection because it can leave a lump sum to your estate.
e.g using the previous example – you’re getting a mortgage for €250,000 over 25 years.
Some people buy a life insurance policy to clear the mortgage and leave a lump sum for their family.
Don’t do it.
As you can see from the above example, if you die early in the policy, your family will be in trouble. How long could they survive on €2000?
Life insurance leaves a lump sum, mortgage protection doesn’t
If you can afford serious illness cover, you should buy some.
Whereas mortgage protection clears the mortgage on death, serious illness cover clears the mortgage if you survive a serious illness…so you can focus on getting better without having to worry about how your mortgage is going to be paid.
Without serious illness cover, how would you pay your mortgage if you couldn’t work due to illness?
But always buy serious illness cover on a separate policy. If you add it to your mortgage protection policy, the bank will get the proceeds on any claim.
Read more about mortgage protection serious illness cover.
If you’re making an application on your own, go for Zurich life – here’s why.
If you have someone else on the mortgage, Friends First are worth considering- here’s why.
This depends on:
Well I am biased but I’ve got to say ours is simple to use, up to date and includes discounts.
And unlike going to your bank, we can offer quotes from 6 insurers, not just Irish Life and Bank of Ireland life.
In your face banks!
Click here to open our mortgage protection calculator.
We offer discounted quotes and independent advice on policies from:
Here, of course 😉
Our mortgage protection comparison table makes it easy to compare the various policies on offer at a glance
If you’d like me to clear anything up, I’m here for you.
I was once a first time buyer so I know how stressful closing on a house can be.
If I can help, please get in touch using the quick outline form below or even better, go crazy, pick up the phone and give me a call on 05793 20836.
It’s nice to talk to a real person. I look forward to our chat!
Nick McGowan
lion.ie | making life insurance easier
We’re an online life insurance broker. We compare life insurance quotes for mortgage protection, life insurance, specified illness cover and income protection from all 6 leading life insurance companies in Ireland, instantly and anonymously.
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