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Once you submit the policy documents to your bank, they will ask you to sign an Assignment Form allowing their interest to be noted. The bank then writes directly to Royal London to note their interest on the policy, and Royal London confirms when this has been completed.
The figure to insure is the amount you are borrowing from the bank, minus your deposit. For example, if your property costs €540,000 with a €54,000 deposit, you would insure €486,000.
Mortgage Protection policies are designed to track your mortgage decreasing over time, so the cover remains higher in the early years when you’re paying more interest than capital. The life company uses an assumed interest rate of 6% to allow for fluctuations over time, ensuring there will always be sufficient cover to pay off your mortgage in the event of death during the term.
All mortgage protection policies use an assumed interest rate of 6%. This means your cover decreases at the same rate as the capital of a loan with 6% interest. Life companies use interest rate bands of 6%, 9%, and 12%, with 6% being standard.
Since actual interest rates are typically lower than 6%, this ensures you always have slightly more cover than your remaining mortgage balance. This buffer guarantees the plan never pays out less than the full outstanding loan amount. Any surplus above the outstanding balance paid out in a claim will be returned to you once the mortgage is cleared.
When tests are outstanding for medical reasons, underwriters will need the results before proceeding with your application. Contact your GP or consultant to expedite the results so the underwriting team can make an informed decision with all the necessary information.
Yes, if the cover is sufficient for your new mortgage (both the cover amount and term length), you can provide the policy documents to your new lender. We can also supply a statement showing your current mortgage protection cover balance.
The cover should be for the amount of the mortgage loan you are drawing down from your lender, not the full property price.
If you no longer have a mortgage, you can cancel the cover without penalty at any time.
Mortgage Protection is a specific type of life cover designed purely to clear your mortgage if you die during the loan term. The cover amount reduces over time in line with your mortgage balance, making it the most affordable form of life cover as the insurer’s risk decreases each year. The policy is normally assigned to the bank, so if you pass away, the mortgage is cleared but no payment goes directly to your family.
Life Insurance (level term assurance) offers more flexibility. You choose the cover amount and term, and the cover stays level throughout the policy. If you take out €300,000 cover, your family receives €300,000 whether it’s year one or year twenty. This lump sum can be used for the mortgage, living costs, education, or any other family needs. The money goes to your beneficiaries, not the bank, and they decide how to use it.
Key differences:
Many people in Ireland combine both: mortgage protection to satisfy the bank’s requirement, plus separate life cover to ensure the family is financially secure.
The plan can be issued one month in advance of your requested start date. If you’re certain of your drawdown date, you can have the policy issued with a future start date.
Consider issuing the policy with an extended term and slightly increased cover (102% of your mortgage amount) to allow for any delays after policy issue. This typically adds less than €1 to your monthly premium while providing complete peace of mind and protection against complications or delays before drawdown.
Royal London also offers one month’s free cover, so you won’t pay your first premium until a month after policy issue, but you’ll be covered immediately.
Yes, you are considered a smoker if you vape, smoke, or use any nicotine replacement products. Even occasional use within the last 12 months qualifies as smoking for underwriting purposes.
Yes, if you haven’t smoked, vaped, or used any tobacco or nicotine replacement products for more than 12 months with no intention to resume, Royal London may review your rates to non-smoker rates. You’ll need to confirm this by signing paperwork, and full disclosure of all material facts is essential.
Use your current communication address until you move into your new home. Once you move in after policy issue, simply notify us and we’ll ask Royal London to update their records.
Unlike home insurance, mortgage protection covers your life, not the property directly. Your address doesn’t appear on your Mortgage Protection policy certificate, allowing you to use the policy if you move in the future, provided the cover still suits your requirements.
The Guaranteed Insurability Option (also called Special Events Increase Benefit) allows you to increase your cover by up to 50% of your original benefit (or €100,000, whichever is lower) without providing further medical evidence if you increase your mortgage, get married, or have or adopt a child.
This option applies only up to age 55 and must be used within 6 months of the relevant event. Taking out additional cover separately can often be more cost-effective in those circumstances.
Yes, Royal London can reduce your cover if you’ve paid off a lump sum. They’ll require a written request and a statement from your lender, then provide you with an updated quote.
Mortgage protection is designed to decrease in line with your mortgage balance. However, once your mortgage is cleared (or if you switch lenders), you may still want life cover.
The conversion option allows you to convert your decreasing mortgage protection into another type of life cover (such as level term or whole-of-life) without further medical underwriting.
This option protects you against future changes in your financial circumstances. For example, if you need to extend your mortgage term to lower repayments, switch to interest-only payments, or remortgage for home renovations, you can adjust your policy accordingly. Adding this option increases your discounted premium by just 5%.
Mortgage protection is the standard life cover for mortgages, but you can opt for life insurance instead if you prefer. Here’s how they differ:
Mortgage Protection is designed purely to clear your mortgage if you die during the loan term. The cover reduces over time with your mortgage balance, making it the cheapest form of life cover. The policy is assigned to the bank, so if you pass away, the mortgage is cleared but nothing goes directly to your family.
Life Insurance (level term assurance) provides more flexibility. You choose the cover amount and term, and the amount stays level throughout the policy. If you take out €300,000 cover, your family receives €300,000 whether it’s year one or year twenty. The lump sum can be used for mortgage, living costs, education, or any family needs. The money goes to your beneficiaries, and they decide how to use it.
Summary:
Many people in Ireland combine both: mortgage protection to satisfy the bank’s requirement, plus separate life cover to ensure family financial security.
The amount varies by personal preference, but affordability is key. Your premium must be sustainable on an ongoing basis while providing sufficient cover for your loved ones.
Your personal circumstances dictate the cover amount and term. For young families, a good rule of thumb is triple your income to see your youngest child to age 25.
Additionally, consider covering personal debts, car loans, and other obligations separate from your mortgage to ensure your loved ones aren’t burdened with debt after you’re gone.
Your personal circumstances determine the term length. If you have a young family, you may want cover that provides a cushion until they reach adulthood. As mentioned, triple your income to see your youngest child to age 25 is a useful guideline. The maximum age you can extend this cover to is 90.
Dual Cover is a double payout where two people are covered separately under one plan. Each person has their own coverage.
Joint Life is joint life first death, meaning the policy pays out when the first person dies, then cancels.
Most providers offer dual cover for the same monthly premium as joint life cover, so dual cover is generally advisable.
A conversion option gives you the right to convert your life cover into another policy without providing fresh evidence of health. This option can be used at any time during the policy term up to your 70th birthday (or before the 70th birthday of the older life for Dual Life policies).
If indexation is included, your cover amount automatically increases on each policy anniversary by 3%. Your premium also increases annually by 4%. This accounts for fluctuations in the cost of living and inflation over time, future-proofing your cover.
No, your premium is calculated based on the type of cover over the full term, including any discounts provided. It remains fixed unless you’ve chosen indexation, which involves predetermined annual increases.
You pay your Income Protection premiums gross and claim back the tax through Revenue. You’ll receive an Income Protection Tax Certificate with your policy documents to provide as proof to Revenue.
If your bonus is regular and guaranteed over consecutive years, it can be included as part of your salary. If you make a claim, the insurer reviews your payslips and will consider any additional earnings.
The deferred period should match how long your employer pays sick pay while you’re out of work, as you cannot receive both employer sick pay and income protection simultaneously. The cover only begins when you’re no longer receiving salary from your employer.
If you’re paid sick pay for 3 months, choose the 13-week deferred period. If you’re paid for 4-6 months, choose the 26-week period.
An Income Protection plan only replaces earned income. If you retire early, simply cancel your Income Protection plan when it’s no longer required.
Generally no, unless you take on a more physically demanding job with more manual work or hazardous conditions. It’s worth notifying the life company if this happens so the underwriting team can confirm.
No, redundancy or unemployment is not covered under income protection policies. Losing your job for reasons other than illness or injury (such as being laid off or your employer going out of business) won’t trigger a payout.
Yes, it pays out for serious illnesses like cancer if you’re certified as being unable to work.
Yes, you can cancel your policy at any time without penalty.
To obtain tax relief:
This is your personal decision. Income Protection is one of the most valuable policies available as it protects your income—the very basis on which the bank approved your mortgage. While it’s not compulsory, it’s highly beneficial. If you’ve built up a substantial savings buffer, you could delay taking it out, but consider the risk of being unable to obtain cover later due to health changes.
Yes, Income Protection includes a Guaranteed Increase Option allowing you to increase your cover by up to 20% every 3 years, enabling you to cover salary increases over that period.
If indexation applies, your benefit automatically increases on each policy anniversary by 3%. Your premium also increases annually by 3.5%.
Escalation ensures your payments while in claim increase by 3% per annum. This means if you’re sick long-term, your payout increases with the general cost of living, maintaining the real value of your benefit.
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