Introduction

Buying your first home in Ireland is one milestone — keeping it protected is another.
As we move through different stages of life, our priorities and financial responsibilities change. Maybe you’re remortgaging, downsizing, or simply reviewing your cover to make sure your family is protected.

Two of the most common types of protection in Ireland are mortgage protection and life insurance — and while they’re often mentioned together, they’re not the same thing. Understanding the difference can help you avoid paying for the wrong type of cover and give you real peace of mind that your loved ones are secure, no matter what happens.

In this post, we will answer the most FAQ, frequently asked questions Irish homeowners have about mortgage protection vs life cover — what each one does, who needs them, and how they fit into your long-term financial planning.

1. What’s the main difference between mortgage protection and life insurance?

Mortgage protection insurance in Ireland is designed specifically to pay off your mortgage if you pass away before it’s cleared. The cover amount decreases over time as your mortgage balance reduces.

Life insurance (or life cover), on the other hand, pays a lump sum to your chosen beneficiaries if you die during the policy term. Your family can use this payout however they need — to cover bills, clear debts, fund education, or supplement income. So, while both provide valuable protection, mortgage protection only covers your mortgage, while life insurance offers broader financial support.

2. Do I still need mortgage protection if I already have life insurance?

If you’re taking out a new mortgage, Irish lenders will usually require mortgage protection cover, even if you have a life policy already.
However, in some cases, an existing life insurance policy can be assigned to your mortgage if it offers enough cover and runs for at least the same term.

It’s always worth checking with your bank or broker before taking out new cover — you may be able to save money or avoid duplicate policies.

3. I’m over 50 — do I still have to take out mortgage protection?

Good question — and one that’s increasingly relevant in 2025/26.

Under Irish law, mortgage protection is usually mandatory for residential borrowers under age 50.
If you’re over 50, you may be exempt, depending on your lender and health status.

That said, even if you’re not required to take it out, it can still offer valuable peace of mind — ensuring your loved ones aren’t left with debt if something happens to you.

4. What happens to my mortgage protection if I change or extend my mortgage?

If you switch lenders, remortgage, or extend your term, your existing mortgage protection policy might not automatically transfer.
You may need to take out a new policy to reflect your new loan amount or term.

Many homeowners over 40 find that reviewing and updating their cover every few years ensures it still matches their needs — especially as interest rates, income, and family circumstances change.

5. Is it worth having both mortgage protection and life insurance?

Yes, for many Irish homeowners, having both types of cover is advisable.

• Mortgage protection clears your mortgage balance, keeping the home secure for your family.
• Life insurance provides an additional lump sum that can help your family cover other expenses or replace lost income.

If you have children, dependents, or ongoing financial commitments, having both can ensure your family remains financially stable even after the mortgage is gone.

6. How does age affect the cost of cover?

In Ireland, your age and health play a big part in your premium.

• The younger and healthier you are, the lower the cost.
• As you move into your 40s, 50s, or 60s, premiums tend to rise, since the risk to the insurer increases.

That’s why it’s smart to review your cover early — or even lock in a new fixed-term policy while you’re still eligible for competitive rates.

7. What if my mortgage is nearly paid off — do I still need cover?

If your mortgage is almost cleared, you might consider reducing your mortgage protection or switching to a smaller life policy that focuses on income protection or inheritance planning instead.

Many Irish homeowners over 55 shift their focus from debt repayment to legacy and family security — ensuring loved ones can maintain their lifestyle or handle final expenses.

📊 Quick Comparison: Mortgage Protection vs Life Insurance

Feature	Mortgage Protection	Life Insurance (Life Cover)
Purpose	Pays off your mortgage if you die	Provides financial support for your family
Cover Type	Decreases with your mortgage balance	Fixed lump sum
Beneficiary	Paid directly to your lender	Paid to your family or estate
Flexibility	Clears the mortgage only	Can be used for any expense
Legal Requirement	Usually required under age 50	Optional
Ideal For	Home loan security	Broader family protection, legacy planning

Summary

No matter what your age, reviewing your financial protection is one of the smartest steps you can take.
In simple terms:

• Mortgage protection insurance in Ireland ensures financial security for your family — if you pass away, the policy clears your remaining mortgage so your home is protected.
• Life insurance ensures your family’s financial security by offering extra protection beyond the mortgage — helping cover daily expenses, education, and future needs.

If your mortgage is nearly paid off, or your family’s circumstances have changed, it may be time to reassess what kind of mortgage protection or life cover best suits your stage of life.

A qualified financial adviser can help you compare options, check for exemptions, and ensure you’re getting the right protection at a fair price. Because ultimately, the goal isn’t just to protect your mortgage — it’s to protect your family’s future.

Looking to review your mortgage protection or life cover?

Talk to Stephen Donnelly (QFA) (RPA) at Donnelly Financial Planning today for personalised expert advice on choosing the right policy for your home and family.

Author, Stephen Donnelly, QFA, RPA
Managing Director, Donnelly Financial Planning Ltd
Regulated by the Central Bank of Ireland.

Disclaimer:

This article is for general guidance only and does not constitute financial advice.
Please consult a regulated financial advisor for tailored recommendations.
Donnelly Financial Planning Ltd is regulated by the Central Bank of Ireland.