Choosing the right type of insurance can feel confusing, especially when it comes to Life Insurance and Mortgage Protection. While both are designed to help protect your loved ones financially if life takes an unexpected turn and you pass away, they serve different purposes.
Life insurance is designed to help support those who depend on your income if you pass away while your policy is active. This could be your family, or other financial dependents that you choose to protect. They would get a lump sum payment to help with costs like childcare, education, and other everyday living expenses.
Life Insurance is optional, and you can personalise the policy so that it works for your needs. You choose the amount of cover, the length of the policy, and who the lump sum would go to.
Mortgage protection is similar to Life insurance because it helps protect your family, and it is a type of life cover. It's required by mortgage providers, including PTSB, when you buy a property with a loan. It helps pay off your mortgage if you or another policy holder pass away during the term of the loan and there are different types of cover to choose from.
The main difference is that Mortgage Protection pays a lump sum directly to your mortgage provider to help pay off that loan. Life Insurance, on the other hand, pays the lump sum to your loved ones.
| Feature | Life Insurance | Mortgage Protection |
|
Purpose |
Provides financial support to your family if you pass away. |
Helps pay off your mortgage if you pass away during the mortgage term. |
| Is it a requirement? | No, it is optional | Yes, it is required by most mortgage lenders. |
| Payout | Lump sum payout that you set. | Pays off the remaining balance of your mortgage. |
|
Who is paid |
Your family or dependents (chosen beneficiaries). |
Your mortgage lender. |
|
Can cover other costs? |
Yes, daily living, childcare, education, bills, etc. |
No, it only clears your outstanding mortgage balance. |
| Policy flexibility | Choose cover amount, term, beneficiaries. | Tied to your mortgage amount and term. |
| Optional extras | Specified illness cover, indexation, conversion options. |
Specified illness cover, conversion options. |
Talk to an expert Financial Advisor.
If you're reviewing your finances, but you're not ready to book an appointment, give us a call on +353 (1) 215 1390 to learn more about the Financial Planning Meeting and next steps. Lines are open 9am to 5pm, Monday to Friday (excluding public holidays).
Not sure what to bring to your financial planning meeting? See our checklist to ensure you come prepared.
Permanent TSB plc trading as PTSB is regulated by the Central Bank of Ireland. Permanent TSB plc is tied to Irish Life Assurance plc for life and pensions products. Irish Life Assurance plc is regulated by the Central Bank of Ireland.
The content on this webpage, provided and prepared by PTSB, is for informational purposes only and does not constitute as financial advice.
