A Practical Guide to Mortgage Protection

Buying your home is one of the biggest financial commitments you will ever make, so putting the right cover in place to protect it should be a top priority. It is the most practical way to ensure that if the worst were to happen, your family would have sufficient money to survive and maintain their lifestyle.

Mortgage protection insurance is typically required when taking out a mortgage and essential for anyone buying their home. The good news is that it is the cheapest form of life insurance and it decreases over time in line with your outstanding mortgage.

recent survey of Irish consumers found that almost two thirds of respondents regularly think about the future financial situation of their loved ones if they were to die.

The biggest household savings can be made by searching for a better-value life insurance/mortgage protection policy, at over €50 a month.

The following blog outlines a few things you need to know about mortgage protection and what cover you can expect to get. As an independent broker Alpha Wealth research the market and offer the most suitable cover for the cheapest price. Contact us for a free quote HERE.


  • Mortgage protection is designed to pay off the decreasing sum insured in the event of your death. This means your premium payments should reduce each month in line with your outstanding mortgage, provided that your mortgage payments are fully up to date.
  • Reducing cover is cheaper than cover which remains at the full initial level throughout the term of the policy.
  • If you wish, you can add Specified Illness Cover for an amount equal to your life cover. This is also a form of reducing cover. By adding this option your plan will pay out on the earlier of death or the diagnosis and certification of a prescribed specified illness.

Case Study

John is 30 years of age. He has just bought his first home with a mortgage of €200, 000. He earns €2, 500 a month and his monthly mortgage repayments are €800. He wants to ensure that he can easily change his cover in the future as he plans on moving to a bigger home in 5 years time.

John knows he must have mortgage protection to clear his mortgage so it won’t be a burden to his family in the event of his death. He also wants the security of knowing he will be able to meet his mortgage repayments and maintain his current standard of living if he became ill over the long term and was unable to work.

If this happened his employer would pay him 50% of his salary (€1, 250) for the first six months and he will be entitled to the State Illness Benefit of about €10,000 a year.

This would be insufficient to meet his monthly mortgage repayments, maintain his current lifestyle and pay his bills.

John takes out €50, 000 Specified Illness Benefit along with his €200, 000 Lump Sum on Death Cover. If he becomes seriously ill, the bank to which the policy is assigned will use the €50, 000 Specifies Illness Benefit to meet his monthly repayments.

After 10 years  John suddenly dies of a heart attack. The current level of cover on the mortgage protection plan is roughly €100,000; similarly the outstanding mortgage is circa €100,000. A claim is made on the mortgage protection policy and the lump sum is paid directly to the lender to clear the mortgage. If there is surplus after the loan has been paid, the balance will be paid to John’s estate.

Fast Track, Hassle Free Application

Taking out insurance with us couldn’t be easier. We have an exclusive fast track application process. If you’re happy with the quote, we can complete the application on the phone with you in 10-15 minutes and often have you on cover the same day if necessary.

Easy Savings

You could save even more money if you took out your existing policy through your bank or directly with your insurance company, who often sell expensive policies due to them only using one provider or selling the wrong level of cover. Some policies were previously rated or charged a loading due to ill health or family health issues or if you are male (due to the pricing changes brought about by the EU Gender Directive).

Non-Smoker Discount

Medical statistics show that, as a group non-smokers live longer than smokers. Recognising this, life companies offer a substantial discount if the person to be insured hasn’t smoked any form of tobacco during the last 12 months. So, if you’ve been off cigarettes and nicotine for 12 months or more, you’ll qualify for non-smoker rates (which are significantly cheaper).


Hassle and a belief that there is no difference in suppliers are the main reasons for people not switching. However, those that do make the move are happy about it. Most said they feel they have saved money when they switched, with most finding the process easy. What are you waiting for?

Daniel Varian, is Marketing Manager of Alpha Wealth Limited and based in Little Island, Co Cork. Tel +353 (0)21 206 1780, email dvarian@alphawealth.ie or web here. Follow Alpha Wealth on Twitter (@Alphawealthcork), Instagram, Google+, Linkedin & Facebook

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