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First Time Buyer Mortgage Protection Insurance Ireland 2018

August 8 2018 5 min read Blog Mortgage Protection

 

first time buyer mortgage protection

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 should I buy? Which company should I buy from?

I remember how stressful buying your first home can be as I did it myself not too long ago.

So I’m here to make arranging your mortgage life insurance a doddle.

First Time Buyer Mortgage Protection Insurance Ireland 2018 – Frequently Asked Questions

What is mortgage protection?

Mortgage protection is a basic type of life insurance policy that pays off your mortgage should you die during the term of your mortgage.

You can’t avoid it for most Irish mortgages but the bank may, at their discretion  waive the need for mortgage protection:

  1. for investment/rental mortgages.
  2. if you can’t get cover due to health reason.
  3. if you’re over 50 at the time the loan is approved

Consumer Credit Act 1995

What’s the difference between mortgage protection and life insurance?

Mortgage Protection (or mortgage life assurance as the banks like to call it….just to confuse you)

Mortgage protection is a basic death policy that simply clears debt to the bank. In other words, it covers the bank’s arse 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.

  • you die next year with €248,000 outstanding – your policy pays €248,000 to your bank.
  • you die in 24 years with €600 outstanding – your policy pays €600 to your bank.

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 leaves a tax free lump sum to your family if you die

e.g using the previous example – where you’re getting a mortgage for €250,000 over 25 years.

  • you die next year with €248,000 remaining – your policy pays €248,000 to your bank and €2,000 is left to your family.

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.

Tell me more about income protection for first-time buyers

Income protection is the most important type of life insurance policy…that you’ve probably never heard of.

If you can’t work for over 4 weeks, income protection will pay you up to 75% of your income every week until you get back to work or until you retire. It’s the policy I recommend above all others because if you don’t have an income, how are you going to pay for your mortgage?

Your income pays for everything – if your sick pay through work only pays you for a few weeks or you don’t even have sick pay, then you need income protection. It’s a no brainer.

What about serious illness cover?

If you can afford serious illness cover, you should buy some.

Whereas mortgage protection clears your 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.

Which company is best for first-time buyer mortgage protection?

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 and Royal London offer dual life mortgage protection.

How much does mortgage protection insurance cost in Ireland?

This depends on:

  • your age
  • whether you smoke
  • your health
  • the amount of cover you need
  • the term of your mortgage

How to get the best mortgage protection quote.

I knew you were going to ask that…so I covered it in detail here.

Or if you don’t have time to read that, the best mortgage protection quotes are available through a broker, not your bank.

And unlike going to your bank, we can offer quotes from 6 insurers, not just Irish Life and Bank of Ireland.

We offer discounted quotes and independent advice on policies from:

  • Aviva
  • Friends First
  • Irish Life
  • New Ireland / Bank of Ireland Life
  • Royal London
  • Zurich Life

Where can I compare mortgage protection policies?

Here, of course 😉

Our mortgage protection comparison table makes it easy to compare the various policies on offer at a glance

mortgage protection comparison

If you’d like me to clear anything up, I’m here for you.

Over to you…

Look, I was once a first-time buyer so I know how stressful closing on a house can be – so many questions, so many wrong answers.

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 now we spend so much time in email.

Till then…

Nick McGowan
lion.ie | making life insurance easier

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Blog Mortgage Protection
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Mortgage Protection Insurance Calculator

Basically, Mortgage Protection Insurance clears your mortgage if you die. So, if you (or your partner) meet an early, very sad end, your home becomes theirs, debt-free.

If you didn’t have Mortgage Protection, the debt would keep on keepin’ on and there’d only be one of you to pay it off – which, again, given the apocalyptic state of the housing market, would be really, really rough.

Now, the lender won’t actually give you a mortgage without Mortgage Protection, so you’re gonna have to cough up for it, whether you want to or not.

But!

That doesn’t mean you should buy Mortgage Protection Insurance from your lender.

In fact, you probably shouldn’t. Which leads nicely onto question numero uno in this unofficial FAQ.
July 27 2018 6 min read Blog Mortgage Protection

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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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