Mortgage protection insurance is a life insurance policy that pays off your mortgage if you or your partner die during the term of the mortgage. It runs for the same length of time as your mortgage. So, if you take out a mortgage over 20 years, your mortgage protection insurance must also be in place for 20 years. If you die during the term, your insurance company pays the policy benefit directly to your mortgage lender. Your lender uses the amount needed to pay off the mortgage and, if there is any left over, they will pass it to your estate. You can change insurer during the term of your mortgage if you find better value elsewhere.
By law, your lender must make sure that you have this cover before taking out a mortgage. However, your lender may allow you to take out a mortgage without having mortgage protection insurance if:
- You are buying an investment property
- You are over 50 years old
- You cannot get this insurance
- You have a life insurance in place already. You can use an existing life insurance policy as long as it is not already pledged or assigned to cover another loan or mortgage and it provides enough cover
This type of insurance does not cover your repayments if you cannot work due to redundancy, sickness or disability. For this type of cover, you will need to consider other types of insurance such as income protection, serious illness or payment protection.
Call our Mortgage Protection Specialist on 061-513076 to discuss what cover is best for you!