For most people their home will be the largest purchase they ever make and their mortgage is their largest financial commitment.
If you are taking out a mortgage then there are three types of protection policies you will need to consider, life cover, specified illness and income protection.
All three policies are designed to protect you and your loved ones. While insurance all comes at a cost, it is extremely important that you identify areas of exposure for you and your family and work to try and safeguard yourself all within the constraints of your budget.
Our life & protection advisory team at doddl are experts at working with clients to identify their must haves (life cover is obligatory when it comes to mortgages) and also weighing up options to provide cover that meets your needs at your current stage of life.
We have also developed a new auto quote system that reviews all providers in Ireland and we will send you an instant price matched quote on all three cover types from our website or your account on our doddl DMx mortgage platform.
Here’s what you need to know –
What is Life Cover:
A life cover policy is one that pays out in the event of death. The policy will either pay out a lump sum to a joint policy holder or to your estate on death. There are two main forms of life cover.
- Decreasing Term Mortgage Protection
What is Mortgage Protection cover?
This is the cheapest form of life cover, where the sum assured is taken over a contracted term and decreases annually – typically at a rate of 6%. An example would be a mortgage protection policy of €300,000 over 30 years, where in year 15 the benefit that would be payable on death would be circa €213,000.
- Level Term Protection
What is level term cover?
Under a level term contract the sum insured does not decrease throughout the term. In the example above the policy would pay out €300,000 on death, even in year 15.
Both of the above policies are popular when taking out a mortgage as they can be assigned to your mortgage lender. A mortgage protection policy is designed to clear the mortgage in the event of death, while the level term policy would clear the mortgage, with any surplus going to the joint policy holder or the deceased’s estate.
The basic level term mortgage protection policy is really there to protect the bank, whereas a level term policy has the additional protection of a lump sum for your loved ones.
Whole of life cover is also available but less popular due to premiums being more expensive.
What other insurances can protect me?
When taking out a mortgage you have to look at how you would repay this new commitment in the event of illness or injury.
Living Benefits
- Income Protection
What is an income protection policy?
Income Protection provides a replacement income if you are unable to work due to illness or injury. It protects you by providing a regular income, post any deferred period, for the complete duration of your illness until such time as you return to work or retire. The average duration of an income protection claim in Ireland is 5 years.
You can insure up to 75% of your income, meaning the maximum you can receive in total is three quarters of your income after the state benefit is taken into account, if you are eligible for this.
What if you could not earn an income due to illness or injury? Could you survive on €244 per week from the state and still pay your bills? Self-employed individuals are not even entitled to this state illness benefit so their income could go to zero overnight.
Your income pays for your basic needs and more, so insuring your income is the most important thing you can do.
For self-employed people, who are not entitled to the state illness benefit, income protection is so important and premiums are a tax deductible business expense.
For PAYE workers you can claim tax relief on premiums at marginal rate.
- Specified Illness Cover
What does a specified illness policy cover?
Specified illness cover pays a lump sum benefit if you are diagnosed with a specified illness covered under your plan, alleviating the financial burdens during challenging times.
The lump sum can be used as you choose for treatment, income replacement or home modifications if required.
The cost of cover will depend on the level of cover chosen, your age, your health and options selected.
Living and death benefits are paramount and deserve thoughtful consideration. Seeking guidance from a qualified advisor is crucial in navigating the nuances of each type of insurance. They may appear as a luxury, but for those who have claimed under such policies during difficult times, these insurances become a lifeline.
How can doddl help?
At doddl we have specialist life and protection advisors who can work with you to understand your requirements at your stage of life and help you choose cover that protects you and your loved ones plus also is affordable. We work with all insurance providers in Ireland and price match premiums from all insurance companies in Ireland.
Our real specialism is trying to align where your greatest risks and exposures are and helping explain the cover that is available in simple, easy to understand terms.
Doddl advisors are all normal people with household budgets they are trying to manage themselves. They understand that every policy has a premium and a cost and they look to seek out cover that best suits your requirements for the term you need it for and within budget.
We work with all life assurance providers in Ireland, for an immediate price matched quoted for your review you have two options –
Already on our doddl DMx Mortgage Application Portal – log in and click on the Get a life quote, a quick will be emailed straight to you.
New to doddl and not yet on our application portal – you can request an immediate quote via our website – Get a Life & Protection Quote
Our life advisory team will discuss all options open to you and really look to understand your needs.
Life cover is a term used to describe a policy that pays out in the event of death. There are two main
