What do Generation X and Baby Boomers have in common? You probably got Mortgage Protection before it was cool, like a lot of other things. This means there’s a chance you got your policy while it was more expensive too.
The cost of life insurance is getting lower for level term policies, due to increases in life expectancy. Your Mortgage Protection policy will work best for you if it’s a Decreasing Term Assurance.
Decreasing Term Assurance: This means that as your mortgage decreases, the sum insured by your policy decreases.
In the past, people may have been sold Whole of Life policies as mortgage protection, for a sum that doesn’t decrease over time. If this is you, this could mean that a policy of €200,000 is insured against a property where you have only €50,000 remaining on your mortgage.
You could also have a policy that lasts until your death, but a mortgage that will be paid off in 5 years. Life cover is always a good idea, but cover on your mortgage, and cover on your life should always be separate.
A policy designed to cover a decreasing mortgage sum is the best option for you, with separate cover for your dependents and estate. As many as 20% of people aren’t sure how much they pay per month for Mortgage Protection. Equally, 33% of people admit some confusion about the difference between Mortgage Protection and other Life Insurance policies.
So why change mortgage protection?
In a nutshell, Mortgage Protection will pay off the remaining balance on your mortgage in the event of your death, and pays directly to your lender.
A Life Insurance policy pays out an insured sum in the event of your death. It can be a policy that you hold for a certain amount of time (term assurance), or until death (whole of life). Whole of life is more expensive, comparatively, than term assurance.
Mortgage Protection Medical Issues
If you currently have no medical issues, it’s a perfect time to investigate a new Mortgage Protection policy, as you could be offered cover for standard terms.
Mortgage Protection and smokers
Equally, when you first quoted for your cover, you may have been a smoker, and like many people you may have given up smoking, which can reduce the premium you’ll be offered.
The new premium you would pay could be reduced further because the mortgage sum and term you’re insuring are both smaller than at the time you originally purchased your policy.
Equally, if your original policy was part of the group policy offered by your lender, your potential savings could be pronounced.
There are estimates that switching policies could result in savings between €2,800 and €7,200, depending on your circumstances.
How to get your new policy in place.
- Dig through the paperwork drawer and find out your outstanding mortgage balance, and the remaining term with your lender.
- Get a quote from us for Mortgage Protection.
- Complete the fact-find, and we’ll let you know any potential changes to the standard price quoted.
- Apply online using our easy forms.
- Once your new policy is in place, (and only then!), you can cancel your old policy, and assign your new one to the bank.