5th June 2013


When it comes to buying mortgage protection insurance it can be quite confusing what with the wide range of life companies in the market plus the banks also muddying the waters. It can also be easy to get confused over whether mortgage protection is life assurance and vice versa. In short the financial services industry are not the most user friendly in terms of making things very understandable for the typical layman or woman so here are a few handy hints..

Mortgage Protection/Life Cover
Mortgage protection is indeed life cover – to be precise its decreasing term cover which means that the bank or lender ask you to get life cover to match the period of your house loan. As  this loan is paid off over time so your cover reduces ( hence decreasing term cover) so that when your mortgage loan is totally paid off so too your cover finishes. For example Joe & Mary ( should be Jack & Emily now given how these names are top ranked in Ireland in latest survey!) take out a mortgage for €100,000 over 20 years and at same time take out a mortgage  protection policy for the same amount. If we stopped the clock at the end of 10 years there mortgage loan balance would be crudely €50,000.

Mortgage Protection Payment Insurance
Mortgage Payment Protection insurance typically covers your monthly mortgage repayment in the event that you are unable to work due to an Accident, Sickness or Involuntary Unemployment. It was more a product of those halcyon days when factory plots in Ringsend fetched over €400m and 30% of the labour force worked in construction.  It can still be obtained but a number of providers exited the market as Irish unemployment soared from 7% to 14% +. It is important to stress that unlike Mortagge Protection above – a lender does not require this cover to be in place. It can be an attractive add on depending on the premiums etc but  if you have an existing mortgage and are looking to get this cover it can be very difficult.

Rely on the reach of the Internet
If you’re after a broad idea of the premiums available in the market for Mortgage Protection  insurance then you might wish to shop online using the comparison websites. Using the comparison sites offers a great way to appreciate the benchmark prices for the insurance – although you might wish to do a more extensive search online for the leading or independent insurance providers that aren’t featured on these sites. You will likely find it is possible to get significantly cheaper prices if you use the specialized online providers and not the regular bricks and mortar agents or brokers. Whatever you do avoid the banks as your lender will tell you its much better and easier to go with them for your cover – it will certainly benefit them but not you as captive markets and low prices tend not to go hand in hand!

Here at Low.ie we offer a price guarantee on like-for-like policies that means we'll always give you the lowest quote for the same product.

Taking advice when needed
If you are confused with the prospect of arranging the mortgage protection insurance, you might wish to take advice from a specialist broker  or  independent financial adviser (IFA)who can give you the right guidance to match the right type of  protection to your specific circumstances. You might find that it can be expensive to use the services of the IFAs ( typically internet transactions are a 50th of the cost of doing business face to face) , but if they are able to give you quality advice on the best options, this is likely to be highly beneficial in the long-term.

At Low.ie we offer the best of both worlds as we are online but we also have Qualified Financial Advisers ( QFA’s) ready to answer any query and give you the best advice to suit your circumstances.

Allow Plenty of Time
Given the nature of the cover you are seeking it is quite often that this protection is required quickly i.e. you have purchased a property and finally jumped through all the hoops for a lender to say ‘yes we can’ . Then you are told the deal has to close by X date and the bank tell you to have your cover in place as well ( naturally they also mention why not make an appointment with their friendly financial adviser!) . Mad panic ensues and a backdrop like this always means one end result – you never shop around fully as believe you haven’t the time . This hassle can all be avoided easily as you can tee up your mortgage protection cover some weeks before you close and simply instruct that the policy only be activated when you say so.

 At low.ie we have set up policies within 48 hours but we really advise consumers to do it at least 2-3 weeks before the bank requires it to be in place as there are underwriters involved. Thus what you believe is a minor medical issue may require XYZ life company to request  further information from your GP or at worst have you do a medical which all takes time.