To quote the Ronseal ad, ‘It does what it says on the tin’ – mortgage protection is not too dissimilar.
Mortgage protection is the most cost effective form of life assurance and is used most widely to protect both the borrower and the bank against the risk of the borrower dying within the term of the mortgage.
It is cost effective as the amount of life cover that is paid out is matched to the amount outstanding on the mortgage always. So as the mortgage decreases, so does the life cover that is attached.
A mortgage provider will almost always ask that you have a policy like this to protect themselves before they will agree to allow you to draw down your mortgage. They will insist that they are the first ones to receive the benefit in the event of your death. They can offer to help with this, but you are entitled to shop around and obtain the best policy in the market. There is no guarantee that the bank is doing this for you, especially when they only deal with one life insurance company!
WHY “BEAT THE BANK” INSTEAD OF MY BANK?
A bank is a tied agent to just one of the protection providers in Ireland. I should know because I worked in one for four years! There is no assurance that you are getting the best price or the best product because the bank doesn’t have access to all the providers in the market. We have access to all top 5 mortgage protection providers in the Irish market – Aviva, Irish Life, New Ireland, Royal London & Zurich – providing you with the cheapest and best out there in the Irish market.
WHAT HAPPENS IF I DIE?
Taking the unpalatable one first, namely getting caught by the ‘Grim Reaper’ – in this case your policy is triggered and the life company pays the amount of cover on the policy to you/your bank and your mortgage loan is cleared. This ensures that your partner/spouse and family do not have the added financial burden of trying to cope with paying off a sizeable loan with one the main funders of these repayments, having departed the stage.
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