Buying a home is one of the most significant financial steps you’ll ever take. Along with the excitement comes a lot of responsibility, and that’s why mortgage protection insurance is required by lenders in Ireland.
Mortgage protection does an important job: if you pass away during the term of your mortgage, the policy pays off the outstanding balance. That means your family doesn’t have to worry about losing the roof over their heads at an already difficult time.
But here’s something many people don’t realise: mortgage protection only covers your mortgage. It doesn’t provide any extra money for your family’s everyday needs, education costs, or future plans. That’s where life insurance comes in.
What Mortgage Protection Really Does
Mortgage protection is straightforward:
- It’s tied directly to your mortgage.
- If you die, it clears whatever amount is left on the mortgage.
- The payout goes straight to the bank, not your family.
For example, if you took out a €300,000 mortgage and, after a few years, you still owe €250,000, your mortgage protection will pay that balance off if you pass away. The bank is happy, the house is secure, and your family doesn’t inherit that debt.
It’s a valuable safety net, but notice what’s missing. Your family doesn’t get any extra money in their hands. They keep the house, but now they still have to figure out how to pay for everything else.
Learn more about Mortgage Protection in our latest articles.
Life After Mortgage: The Hidden Costs
It’s easy to think that once the mortgage is cleared, your family’s financial worries would disappear. But in reality, the mortgage is only one piece of a much bigger puzzle. Day-to-day life comes with ongoing expenses, and those don’t stop if your income is no longer there.
Consider the monthly costs your family faces:
- Utility bills like electricity, heating, and broadband
- Groceries and childcare, which can easily run into hundreds each month
- School or university fees, along with uniforms, books, and activities
- Car loans or other debts that still need to be repaid
- Family holidays, healthcare, and lifestyle costs that make life enjoyable and manageable
These are the hidden costs of life apart from the mortgage. While having the mortgage paid off is a significant relief, it doesn’t replace the steady income that keeps everything else running. Without additional cover in place, your family may find themselves struggling to keep up with these responsibilities, and the financial pressure can be overwhelming during an already emotional time.
That’s why relying on mortgage protection alone isn’t always enough; it only solves one problem. Life insurance steps in to cover the rest, giving your family financial breathing room to handle everyday expenses and maintain some sense of normality.
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