What is Mortgage Protection Insurance and Where Can I Get It?

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Mortgage protection insurance or MPI is an insurance policy in Ireland home owners use that will pay off a mortgage in the event that you or a different holder of your policy passes away before the mortgage is completely paid off. The policy will run through the entire length of your mortgage period. This means if you get a mortgage that will take 15 years to pay off, then your mortgage protection insurance will cover you as the policy holder for 15 years. Lenders are legally required to make sure that home owners have mortgage protection insurance set up when they take out their mortgage. A few exceptions exist where a lender may agree to give you a mortgage without coverage and they are as follows:

  • The home owner is buying an investment property
  • The home owner is over 50 years old
  • The home owner cannot get the insurance coverage for whatever reason
  • The home owner already has a life insurance policy in place already.

What are the Different Types of Mortgage Protection Insurance?

  • Serious Illness: It is possible for home owners to include a cover in their insurance policy that will protect their mortgage not just if they die, but also if they are diagnosed with and eventually recover from a serious disease.
  • Reducing Term Cover: Reducing term coverage means that as the home owner continues to make payments on their mortgage, then the amount their policy covers will reduce. This is the cheapest and most common form of mortgage protection insurance.
  • Life Insurance Policy: If a home owner already has life insurance they can use that existing policy instead so long as it is not already covering a different loan or mortgage. Any balance leftover after their mortgage is paid off by the coverage will go to the home owner’s dependents.
  • Level Term Policy: This policy is different from reducing term as it gives you the same amount of coverage throughout the entire term of the mortgage. If the home owner dies before the mortgage is paid off then the policy will cover the remaining balance of the loan and whatever is left over will go to the home owner’s estate.

Where to get Mortgage Protection Insurance

If you are trying to organize your mortgage protection insurance plan during the buying process then you will be able to get a policy from parties like your mortgage lender, a mortgage broker, or from a pre-existing policy.