Mortgage Insurance & Mortgage Protection:

When you are buying a home, there are a few different type of insurance and mortgage protection products that you need to consider.

Please Note: Some insurance and protection policies are optional, while others are required by the mortgage lender before they'll issue your mortgage cheque:

Insurance your mortgage provider will required you to have (at a minimum):

• Life insurance / mortgage protection insurance
• House insurance (at a minimum, you are required to insure the structure)
  

You should also consider the following optional insurances:

• Serious Illness Insurance (which can be built into your mortgage protection cover)
• Contents Insurance (usually built into your house insurance cover)
• Mortgage Repayment Protection Insurance
• If you are buying with a partner and you are not married, you should take out inheritance tax cover. (if you get married, you can subsequently cancel the insurance)
  

What is Life Insurance / mortgage protection?

• A mortgage protection policy is designed to pay off your mortgage if you die during the term of your mortgage.
• The cheapest form of mortgage protection is ‘Decreasing Term Assurance’. This cover reduces in line with the reducing balance of your mortgage
• If you take out a joint mortgage, you are required to take out a policy to cover both you and your partner, so that the mortgage would be completely paid off if either of you died.
  

House Insurance

• This covers the structure of the home against damage by fire, explosions, storms and floods, malicious damage, subsidence and landslip.
• The house needs to be insured for the Replacement Value of the house not the Purchase Price. This will usually be lower than the market value
• The valuation report completed for your lender will specify how much the house needs to be insured for.
• The lender will need their interest in the house to be noted on the policy.
  

Serious Illness Cover

• This can be built into your mortgage protection policy
• Serious Illness cover is designed to pay off the mortgage in full if you suffer from a specified illness covered by the policy.
• Although optional, it is definitely worth considering because if you suffer from a serious illness and cannot work, paying the mortgage would be much more difficult.
• After having a heart attack, for example, your mortgage would generally be paid off under this type of policy, even if you fully recover.
  

Contents Insurance

• We would highly recommend that you insure the contents of your house e.g. your TV, furniture etc.
• Most insurance companies and brokers can offer you a joint policy for both the Contents and Structure which usually works out cheaper than taking out two separate policies.
  

Mortgage Repayment Protection Policy

• Also known as accident, sickness and redundancy insurance
• This type of insurance will cover you in the event that you are unable to work because of forced redundancy or ongoing sickness.
• It will pay out a specified amount to cover your mortgage payments.
  

Inheritance Tax Cover

• If you are buying a property with your partner (and are not married), you should also take out an inheritance tax insurance policy
• These policies are fairly cheap
• It would pay out in the event of an inheritance tax bill, arising from the death of your partner, and the inheritance consequences it has on the property you own together
  

Important Notes:
The general information contained above gives a broad idea about the types of insurance available. It is very important to confirm with your broker or insurance provider exactly what you’re covered for as coverage varies from one insurance company to another. Please make sure you read the small print.

Article From Moving.ie
http://www.moving.ie/mortgages/insurance.asp

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