Authority Guide · May 2026
Do I have to take mortgage protection from my bank in Ireland?
What Irish law actually says — and why your lender has to accept a policy you arrange yourself.
By Donal Milmo-Penny QFA FLIA · May 2026
The 40-word answer
No. Under Section 126 of the Consumer Credit Act 1995 your bank must ensure cover is in place — but the Consumer Protection Code prevents your lender from insisting the policy is bought through them. You can buy mortgage protection from any authorised intermediary in Ireland.
What the law in Ireland actually requires
Section 126(1) of the Consumer Credit Act 1995 obliges your lender to make sure a life-assurance policy is in force that, on death, would clear the principal estimated to be outstanding in the year of death. The obligation sits with the lender — to ensure cover exists. It does not require you to buy that cover from the lender.
Under the Central Bank of Ireland's Consumer Protection Code your bank cannot insist the policy be arranged through them. They must accept any policy that meets the Section 126 standard.
Plain English
The bank is required to check there is cover. They are not allowed to force you to take their cover.
The four statutory exemptions — Section 126(2)
There are four cases where the Section 126 cover requirement does not apply:
- Investment / buy-to-let property. The property is not intended as the principal residence of the borrower or their dependants.
- Uninsurable risk. The borrower is in a class of persons that an insurer would not accept, or only at a premium significantly higher than that payable by borrowers generally.
- Age 50+ at drawdown. The borrower is over 50 years of age at the time the loan is approved.
- Existing cover. The borrower already has life assurance arranged that, on death, would pay a sum at least equal to the Section 126(1) requirement.
Why a whole-of-market broker beats a tied bank channel
Banks and tied agents distribute one insurer's product. AIB, Bank of Ireland, PTSB and EBS, for example, channel mortgage protection through Irish Life or New Ireland — they do not compare the market on your behalf. A whole-of-market broker, by contrast, must show you the comparison across all five Irish life offices: Aviva, Irish Life, New Ireland, Royal London and Zurich. On a 30-year mortgage, a €5/month difference in premium compounds to over €1,800 over the term.
| Channel | Reads the policy | Fights for price | Whole-of-market |
|---|---|---|---|
| Bank / tied agent | — | — | ✗ |
| Comparison site | — | ✓ | Limited |
| Traditional broker | ✓ | — | ✓ |
| mylife.ie | ✓ | ✓ | ✓ (5 of 5) |
Can the bank delay drawdown if I use my own broker?
No. Once your policy is in force and assigned to the lender, the bank is obliged to accept it. Mortgage protection must be in force before drawdown, so plan to apply 4–6 weeks ahead — particularly if you are likely to need a GP report. For non-smokers under 40 with no declared medical conditions, same-day cover is routinely available.
The two questions to ask your bank
- 1. Can you confirm in writing that you accept policies arranged by an authorised intermediary? They must.
- 2. Can you confirm the Section 126 sum required and the term — including any offset for existing cover?
Frequently asked
Is mortgage protection legally required in Ireland?
For most owner-occupier mortgages, yes — Section 126 of the Consumer Credit Act 1995 requires the lender to ensure adequate life cover is in place. Four statutory exemptions apply: buy-to-let property, uninsurable risk, borrower aged over 50 at drawdown, and existing cover that already meets the standard.
Can my bank refuse to accept mortgage protection from another insurer?
No. Under the Central Bank of Ireland's Consumer Protection Code, your lender cannot insist the policy is arranged through them. They must accept any policy that meets the Section 126 standard from any authorised intermediary.
Can the bank delay my mortgage drawdown if I use my own broker?
No. Once your policy is in force and assigned to the lender, the bank is obliged to accept it. For non-smokers under 40 with no declared conditions, same-day cover is routinely available. Allow 4–6 weeks if a GP report may be required.
Does using a broker cost more than going directly to my bank?
No. A whole-of-market broker costs no more — commission is built into all market premiums. The difference is that a broker compares all five Irish life offices on your behalf, while your bank is tied to one insurer.
What are the four exemptions from Section 126 mortgage protection?
The four Section 126(2) exemptions are: (1) investment or buy-to-let property, (2) the borrower is in a class of persons insurers would not accept or only at a significantly higher premium, (3) the borrower is aged over 50 at drawdown, and (4) the borrower already holds life assurance sufficient to clear the outstanding loan.
About the author
Donal Milmo-Penny QFA FLIA — Research Lead, mylife.ie. More than twenty years' experience in Irish financial services, protection and client advisory work. Qualified Financial Adviser and Fellow of the Life Insurance Association. Former Chairman of PIBA and Director of Brokers Ireland.
Regulation
Section 126
Consumer Credit Act 1995
Market
5 of 5
All Irish life offices
Authorisation
CBI C42382
SMP Financial Ltd
Compare all five Irish life offices
mylife.ie compares Aviva, Irish Life, New Ireland, Royal London Ireland and Zurich Life on price and policy quality — in one conversation.
This article provides general information only and does not constitute personal financial, tax, or legal advice. mylife.ie is a trading name of SMP Financial Ltd, regulated by the Central Bank of Ireland as an insurance intermediary (C42382). Telephone 01 662 9133. Sources: Consumer Credit Act 1995 Section 126 — irishstatutebook.ie; Consumer Protection Code — centralbank.ie; Citizens Information — citizensinformation.ie; CCPC — ccpc.ie.