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anoteher mortgage question

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  • 14-12-2008 3:20am
    #1
    dbeermat93
    Closed Accounts Posts: 40 ✭


    Hi

    in relation to life policies

    i have 2 life policies; one with IRISH LIFE which has cover for 64000 and one from my employer which has a cover of 3 and a half times my salary.

    my question is, in regard to getting a mortgage and taking out a life policy to protect the banks investment, would the existing two life policies be taken into account?for example, if the two existing life policies were to give a combined value of 200,000 and I was looking for a mortgage of 250,000, then the difference would be 50,000 or am i away off in my assumption?

    regards

    i hate fu**en money matters!!:confused:


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    #2
    IsThatSo?
    Closed Accounts Posts: 988 ✭✭✭IsThatSo?


    I wouldn't include the work one myself, I also have the same "death in service" benefit from my employer and it was never taken into consideration, BUT I would not want it to be as it would be a little bit of a nest egg for my family if I died, a bonus if you like :)

    The 64k one could be taken into account, make sure to mention it. It depends on the term left though as it would have to be in force for as long as your mortgage was being paid. If its only got another 15 years to run and you have a 25 or 30 year mortgage then they probably won't accept it.

    When we were getting our first mortgage we only got a policy enough to cover that mortgage. When we got our second mortgage we were wiser and got a policy for higher than the value of the mortgage. This was in case we ever decided to borrow to renovate/extend and to leave some funds available after mortgage paid if one of us died. OK, we are paying more than we need to, but its worth it for the peace of mind, its not a lot extra. This is just food for thought. The form filling for life policies is a real pain and we won't ever have to do it again, or be penalised for age or illness :D

    You don't mention if you have children, this would have a big bearing on what kind of amounts you insured yourself for. You need to leave enough for them to live on, to supplement any pension and state benefits that is :)


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    #3
    IsThatSo?
    Closed Accounts Posts: 988 ✭✭✭IsThatSo?


    dbeermat93 wrote: »
    i hate fu**en money matters!!:confused:

    :pac: especially at 2.20am


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    #4
    Morrisseeee
    Registered Users Posts: 5,146 ✭✭✭Morrisseeee


    If you are married and/or have kids, then the whole situation of Life Insurance becomes serious. If you die (GF), then > is the mortgage cleared off, if it is, how will your family live after you are gone? If your partner dies (GF) ask yourself the same Q as above... So basically, view every scenario and see if you are happy with the outcome, but make sure you (and your loved ones) are covered adequetly. I was talking to a consultant recently about this whole scenario and yes I have to agree and say I hadn't thought it through thoroughly (tongue twister) !! I thought '....sure it'll be grand', but it wasn't !!!! :eek:


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    #5
    sofireland
    Registered Users Posts: 1,245 ✭✭✭sofireland


    The benefits of a death in service arrangement can not be assigned to a loan as they generally are included as part of the pension scheme.

    As Morrisseeee says, speak to a consultant about your needs and they'll come up with something that will meet your current and future requirements


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    #6
    kaiser sauze
    Registered Users Posts: 1,558 ✭✭✭kaiser sauze


    sofireland wrote: »
    The benefits of a death in service arrangement can not be assigned to a loan as they generally are included as part of the pension scheme.

    As Morrisseeee says, speak to a consultant about your needs and they'll come up with something that will meet your current and future requirements

    Yep, a mortgage issuer will not accept your D.I.S.

    Does you Irish Life one have a 'coversion/convertible option' built in? This might be a worthwhile option to exercise.


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    #7
    kaiser sauze
    Registered Users Posts: 1,558 ✭✭✭kaiser sauze


    OP, my bad, I read your first post as you having cover of 640,000. :o

    The advice I gave earlier for a conversion/convertible is not correct as you can only use these to convert for same level of cover or less (64K in your case).

    Also, you don't state whether the policy is a Whole of Life policy or a term. You can usually change WoL without much hassle, and you can even add a second life. A term plan will involve cancelling and taking out a new one OR taking out a separate one to make up the shortfall OR depending on Irish Life [and highly unlikely], you may be able to increase your cover, but you certainly won't be able to add a second life.

    The key is to explain all your circumstances to an independent consultant and devise the best plan for you.


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