Nick, I’m getting a mortgage from my bank, my banker is pushing life assurance. Do I need life insurance for a mortgage? John
Repeat after me
Ignore that banker!
He’s under serious pressure to hit a sales target.
Don’t believe me?
Fine, I can handle that.
But do you believe Charlie?
Next thing the banker will tell you that his bank can offer you the lowest mortgage protection quote.
He’s some banker that lad.
He might even threaten you if don’t buy from him, it will delay your mortgage.
……or if you don’t buy from him, you’ll run into problems assigning your policy.
All of this is
Take it from me, all you need is a bog standard, basic, cheap as old chips mortgage protection policy (also known as a reducing term life insurance policy)
Because if you die early, your family are screwed.
You see we all fool ourselves into believing we’ll live to a ripe old age.
So by the time we’re called to the pearly gates, our mortgage balance will be tiny, the life insurance policy will pay out, clear that tiny mortgage and leave a substantial lump sum to take care of your family.
Does this sound like you?
But what if you die suddenly, in the early days of your policy?
Your life insurance policy will only clear your mortgage leaving nothing to take care of your family.
Let me explain.
Your mortgage is €300,000 over 30 years. You take out a life insurance policy for €300k
You die in 29 years with €1000 left to pay on the mortgage. After paying off the mortgage, your family gets €299,000.
You die in 1 year with €299,000 left to pay on the mortgage. After paying off the mortgage, your family gets €1000.
Nobody wants to die leaving their family in financial trouble.
That’s why I always advise taking out two policies if you have someone who spends all your money.
By arranging it this way, you know the mortgage protection will clear your mortgage and the life insurance will leave an agreed lump sum to take care of your family.
Peace of mind – that’s really what you’re paying for every month.
By the way, do you know who gets the serious illness payout on a mortgage protection policy?
Hint, it’s not you…and I bet that banker hasn’t explained that to you either.
He’s too busy trying to confuse you with gold, silver and bronze packages full of life insurance (even though you don’t have kids), serious illness cover (that’s paid to the bank), pretty crappy bill pay insurance and overpriced mortgage protection.
What a banker!
Hopefully, you now understand that you don’t need life insurance for a mortgage.
You don’t need serious illness cover either.
Nor income protection.
Depending on your situation, these policies are important but they are not mandatory.
All you need is house insurance and mortgage protection.
Are you in the same position as John?
Is the bank giving you the hard-sell?
If you’d like some independent advice, I’m here to help you.
You can complete this financial questionnaire and I can make a recommendation on the cover you should be looking at.
The recommendation is free by the way.
Otherwise, give me a call on 05793 20836 and we can have a natter.
In the meantime, ask the banker these three questions and watch him squirm.
lion.ie | making life insurance easier
Have a nose through our free guidesView our guides
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.