One of the most important parts of the mortgage application process is making sure that you get the right mortgage protection insurance in place. Your mortgage lender will insist that you have at least the very basic life cover to protect you (and them) in the event of your death. However just simply going for the most basic cover can be a big mistake. You can change your policy at a later date but life cover gets more expensive as you get older so it is best to get the right cover from day one.

So What Are the Options?

There are many things to consider and that’s why it is important that your Financial Adviser completes a full Fact find and then makes a recommendation with the options that are most suitable to you. The details that follow here are really just a basic summary of the options available and not a substitute for Financial Advice.

Serious Illness Cover

This is perhaps the most popular extra benefit that can be added to your basic Mortgage Protection Policy. Statistics show that you are 3 times more likely to suffer a serious illness before the age of 60 than you are to die. For this reason this can be a very valuable benefit to add to your Policy. As this cover is optional it is up to you how much cover you would like to put in place. You could cover the full mortgage balance or if that’s too expensive for your budget then you can consider covering half or less of the mortgage balance. There are many things that are covered by a serious illness policy however the majority of claims are for things like Cancer, Heart Attack and Multiple Sclerosis.

Convertible Option

The standard term for a mortgage is 25 to 30 years. This is a long time and your life can change during the life of your mortgage. If you add a convertible option to your policy then you will be able to convert your mortgage protection into a new policy, without the need for any medical evidence. This can be useful if you need to move house or top up your mortgage to do home improvements in the future. To get a new mortgage or top up you will need a new life policy. As you get older it can be harder to get life assurance at an affordable price. With a convertible option this will not be an issue should you need to make changes.

Hospital Cash Cover

With the cost of VHI and Healthcare increasing all the time this option can be a cost effective alternative to Health Insurance. If you take this option then you receive a cash payment for every day that you spend in hospital. For example you could choose to receive 100 euro for every day you are in hospital.

Accident Cover

Accidents can and do happen and so this cover can provide the peace of mind that at least you will have some money coming in. This cover provides you with a weekly income should you be of work due to an accident. You could for example cover yourself so that the policy would pay you a weekly income of 400 euro for every week you are off work due to an accident.

As I said earlier this is just a very basic summary of the options available to you when taking out a new Mortgage Protection policy. For a full assessment of your options it really is best to speak to a Financial Adviser. An Independent Financial Adviser will be able to help you make the right choice and can also shop around to make sure you get the most competitive premium.

Do you have any questions on Mortgage Protection or Life Assurance? Please feel free to use the comments below.