Mortgage protection is a type of life assurance policy that is designed to pay-off the outstanding balance on your mortgage in the event of your death and before the end-date of the loan. Life assurance is taken out for loan balance and for the term of the mortgage. The life cover reduces annually in-line with your mortgage loan balance and the premium is guaranteed not to increase for the full term of the policy.
Mortgage Protection is the cheapest form of life insurance and may be best suited to covering your mortgage loan balance.
Do I need Mortgage Protection?
If the property is your family home and you are under the age of 50, then the mortgage lender will insist that you have mortgage protection. You are not obliged to take-out the policy directly with the Bank and you may find a lower monthly premium through an Independent Broker. Best to call us and get the specific advice required for your personal circumstances from one of our experienced advisors.
If you are over 50 or if the property is an investment property it is generally a good idea to put into place some level of cover as the property may have to be sold in the event of an untimely death.
How does Mortgage Protection work?
In the event of your death the life insurance company pays-out the financial sum you are insured for to your mortgage lender. The mortgage lender will then pay off your mortgage balance with the proceeds and if there is any balance left over it is payable to your estate.
How much Mortgage Protection do I need?
Mortgage protection which is also called mortgage life assurance may be best suited to house purchase loans as it is the cheapest cover available. The policy is legally assigned to the lender as security for the loan. Your life cover reduces annually in line with the mortgage loan balance and for that reason it is not suitable as standalone life cover. You should have sufficient mortgage protection to cover your mortgage and any other unsecured loans that you might have.
How much does Mortgage Protection cost?
Price varies greatly from company to company and for this reason it’s always a good idea to shop around. At Hanley & Co Life Ltd we guarantee to source the lowest market premiums for the comprehensive cover that you require.