Your home is probably the most important thing you own so it makes sense that you want to protect it. But what would happen if death or a serious illness meant that you couldn’t make your mortgage payments anymore?
Mortgage Protection is simply a form of life insurance linked to your mortgage. It’s specifically designed to help pay the outstanding balance of your mortgage if the worst were to happen to you. This gives your family the security of knowing their home is safe at a difficult time. As long as you have enough cover in place, the plan will help to automatically pay off your mortgage if you die during the term of the plan. Your mortgage protection plan is a type of decreasing life insurance.
This means the amount it pays out reduces every month as your mortgage decreases. Because of that, you only pay for the cover you need. And if you arrange a joint mortgage, the plan can cover both people.
Anyone taking out a mortgage is obliged to have mortgage protection in place. Many people take up a policy with their mortgage provider, but it’s a good idea to shop around for the plan that suits you best. For an instant mortgage protection quote see: https://webquotes.labrokers.ie/WebQuotesMP.aspx
How does Mortgage Protection work?
When you take out a mortgage, your provider will insist you have enough cover in place to repay it if you die within the term of your mortgage.
When you take out a Mortgage Protection plan, you’ll pay a premium each month for the length of your mortgage term. Your mortgage protection plan helps pays off your mortgage if you die before the end of the term. As it’s designed to work with your mortgage, the amount of cover reduces over time as you pay off your mortgage. As you would expect, because your cover decreases over the term, this type of life insurance is usually cheaper than cover which stays at the full amount throughout the term of the policy. The cost of your Mortgage Protection cover will depend on:
- the size of your mortgage – this determines the amount of cover you need
- whether you add specified illness cover • the length of your mortgage – this determines the term of your plan
- your age
- whether you are a smoker or non-smoker
- your current state of health
- whether you take out the plan by yourself or jointly with your partner
If you pay off your mortgage early, you may stop the plan immediately. However, you may prefer to leave your plan in force, to provide additional security for your family. Your Mortgage Protection Cover does not acquire a cash-in value at any time.