Question?????? [Mortgage Protection]

Sleezy

Hi
Does anyone know if mortgage protection is a legal requirement? I was required to take out Life Insurance and Home Insurance when I applied for my mortgage but a friend of mine was required to take out Mortgage Protection Insurance. I was given the option of this but my friend wasn't. He was told it would be required of him. BTW my mortgage provider has hit me with the new interest rates increase. When I took out my mortgage I took out Home and Life Insurances with same crowd for convenience sake. Have now switched my Home Insurance away from them and going to take Life Insurance business from them too. Theie 40 odd euro interest increase will cost them a loss of twice that amount in lost revenue on the insurances. If you also have your vinsurances with the same crowd your mortgage is with then I recommend you shop around for cheaper insurance. You save money and hit back for the interest hike at the same time.

unclebill98

Sleezy wrote: »

Hi
Does anyone know if mortgage protection is a legal requirement? I was required to take out Life Insurance and Home Insurance when I applied for my mortgage but a friend of mine was required to take out Mortgage Protection Insurance. I was given the option of this but my friend wasn't. He was told it would be required of him. BTW my mortgage provider has hit me with the new interest rates increase. When I took out my mortgage I took out Home and Life Insurances with same crowd for convenience sake. Have now switched my Home Insurance away from them and going to take Life Insurance business from them too. Theie 40 odd euro interest increase will cost them a loss of twice that amount in lost revenue on the insurances. If you also have your vinsurances with the same crowd your mortgage is with then I recommend you shop around for cheaper insurance. You save money and hit back for the interest hike at the same time.

There is no legal need for it but it can considerable cheaper to obtain it at a young age and earlier in the mortgage.

As for HI and LI. These can be with anyone but must be tied to your mortgage. There is plenty of range out there with these products but be careful as T&C's vary massively so make sure you get the one for your needs. LI can be level, decreasing with the mortgage amount and can be convertible which means if you upgrade house you can take the cover with you without having to start again. This is handy cause if your young and healthy you can take this policy with you for the rest of your mortgage life.

Sleezy

unclebill98 wrote: »

There is no legal need for it but it can considerable cheaper to obtain it at a young age and earlier in the mortgage.

As for HI and LI. These can be with anyone but must be tied to your mortgage. There is plenty of range out there with these products but be careful as T&C's vary massively so make sure you get the one for your needs. LI can be level, decreasing with the mortgage amount and can be convertible which means if you upgrade house you can take the cover with you without having to start again. This is handy cause if your young and healthy you can take this policy with you for the rest of your mortgage life.

Thanks for that.:)

CLAUDINE

I have had a life insurance policy with New Ireland since 1991. The premiums although increased every year by a marginal amount have now increased for this year by 400%. The reason? we are older now and my husband had notified them that he had arthritis but that was back in 1994.!! Now `16 years later it is used to hike my premiums from 85 euro per month to 397! Is this legal? there has been no deteroration in our health my husband has since stopped smoking over 2 years ago so how can this be? - HELP!!!

Kennie1

CLAUDINE wrote: »

I have had a life insurance policy with New Ireland since 1991. The premiums although increased every year by a marginal amount have now increased for this year by 400%. The reason? we are older now and my husband had notified them that he had arthritis but that was back in 1994.!! Now `16 years later it is used to hike my premiums from 85 euro per month to 397! Is this legal? there has been no deteroration in our health my husband has since stopped smoking over 2 years ago so how can this be? - HELP!!!

What you have is whats known as "Reviewable Whole of Life Cover" The cost of your benefits are not linked to your premium per say. When you originally took out the cover, the premium was being split two ways 1)a % was going towards the cost of benefits and 2) a % going into a "buffer" fund. This fund was to cover the higher cost of the benefits as ye got older. What's gone wrong is that NI would have either priced it for too short a period or the growth rate that they assumed was wrong. The policy premium was guaranteed for the first 10 years and the premium was to be reviewed every 5 years there after taking account of the value of the buffer fund, but when the policy is reviewed its like taking out a new policy at your current age without having to supply fresh medical evidence NI is not the only company that sold this product and got it wrong, nearly them all did and thousands of people are complaining about this round the country.

Chances are that you had very cheep whole of life cover for the last number of years that and now that the buffer fund has run out you are now faced with paying the full cost of the cover. It may well be worth your while to go and sit down with your provider and apply for a new policy all together as this may be cheaper!!!

carser

Hi all - some advice needed please...

We have been approved for our mortgage of €266,000, however my boyfriend has been refused mortgage protection due to a valve replacement in his heart 8 years ago. Since then there have been no complications etc etc... he did take out a 20 year term policy for 150,000 as did I, but the Insurance Co are not willing to increase this. I am wondering are we the only ones in Ireland in our 20's to be facing this problem? Neither of us are smokers, drinkers or over-weight..... all advice greatly appreciated as the back will not release the cheque until we have secured our protection.

Carser

Kennie1

This should not present a problem for your partner as such...Bring the letter of refusel to your bank and they will have to accept this and issue the mortgage. They will ask that you take out a mortgage protection policy for the full 266000 though and you could also offer to assign the existing policy for you partner.

I assume that ye took the other policy before your partner had the HVR? Have ye tried other companies? Depending on the circumstances some companies will offer terms to people with HVR but they will have to pay an increased premium, as a guide to whether it is worth his while seeking mortgage protection elsewhere here is some of the conditions that he would need to comply with;

Full and complete recovery
Not taking any medication
Has he any other family member's with heart conditions
long term prognosis

Hope the above info helps!

carser

Hi

Thanks for the swift reply. We have taken our declinature letter to our bank but they are not willing to release our cheque. We took out the term policy FOUR years after the surgery so they were willing to insure us then. Since then, there have been no changes in his circumstances at all. We will just have to go down different routes otherwise we will never be home owners!

Thanks again

phormium

Some banks will accept a waiver for life cover where the applicant is unable to get it, obviously your bank is not one of those, any chance you can apply to other banks at this stage?

Drumpot

There is a new Life Assurance company (pulse) that will provide life cover for people who are declined/refused life cover by Life Assurance companies.

The only snag is that the maximum term they will give is 10 years.

That is not to say that a person cannot reapply for more cover after 10 years. In the case of your partner, they may actually be able to get life assurance from normal companies at after a few years have gone by with no ill effects of the operation.

If your bank would accept initial life cover of €266k for 10 years, it might be worth exploring.

Drumpot

Kennie1 wrote: »

What you have is whats known as "Reviewable Whole of Life Cover" The cost of your benefits are not linked to your premium per say. When you originally took out the cover, the premium was being split two ways 1)a % was going towards the cost of benefits and 2) a % going into a "buffer" fund. This fund was to cover the higher cost of the benefits as ye got older. What's gone wrong is that NI would have either priced it for too short a period or the growth rate that they assumed was wrong. The policy premium was guaranteed for the first 10 years and the premium was to be reviewed every 5 years there after taking account of the value of the buffer fund, but when the policy is reviewed its like taking out a new policy at your current age without having to supply fresh medical evidence NI is not the only company that sold this product and got it wrong, nearly them all did and thousands of people are complaining about this round the country.

Chances are that you had very cheep whole of life cover for the last number of years that and now that the buffer fund has run out you are now faced with paying the full cost of the cover. It may well be worth your while to go and sit down with your provider and apply for a new policy all together as this may be cheaper!!!

Agreed . . Good Advice. . . I hate those reviewable plans!

If your health has not deteriorated, you might be better off looking for alternative cover as reviews invariably only push up the cost.

Oddly enough, New Ireland Assurance has recently brought out a whole of Life cover that continues after your term is up (and you stop paying the premium!).

If you do go into New Ireland ask about their Whole of Life continuation cover.

bailes

carser wrote: »

Hi

Thanks for the swift reply. We have taken our declinature letter to our bank but they are not willing to release our cheque. We took out the term policy FOUR years after the surgery so they were willing to insure us then. Since then, there have been no changes in his circumstances at all. We will just have to go down different routes otherwise we will never be home owners!

Thanks again

Carser,

Who are you dealing with for your mortgage, they all have to accept a letter of delinature for mortgage protection.

If you tell me what lender it is i might be able to send you on the letter to sign.

P.M. me if i can help

harringtonp

Does anybody know what happens from a mortgage perspective if you cancel a life assurance policy ? I took one out 6 years ago as it was compulsory in order to get a mortgage for a house. The amount to be repaid is much lower now but the premium is the same.

Not having dependents, I'm not concerned about payment on death and have no interest in it. It was a compulsory hoop to jump through to get the mortgage. Is it like house insurance where the interest of the lender is noted on the policy (and they would be on to you if your policy expired) or is it just something you are pushed to have in place at the time of taking out the mortgage but the lender is thereafter unconcerned ?

Answers appreciated, thanks.

Sleezy wrote: »

Hi
Does anyone know if mortgage protection is a legal requirement? I was required to take out Life Insurance and Home Insurance when I applied for my mortgage but a friend of mine was required to take out Mortgage Protection Insurance. I was given the option of this but my friend wasn't. He was told it would be required of him. BTW my mortgage provider has hit me with the new interest rates increase. When I took out my mortgage I took out Home and Life Insurances with same crowd for convenience sake. Have now switched my Home Insurance away from them and going to take Life Insurance business from them too. Theie 40 odd euro interest increase will cost them a loss of twice that amount in lost revenue on the insurances. If you also have your vinsurances with the same crowd your mortgage is with then I recommend you shop around for cheaper insurance. You save money and hit back for the interest hike at the same time.

Drumpot

harringtonp wrote: »

Does anybody know what happens from a mortgage perspective if you cancel a life assurance policy ? I took one out 6 years ago as it was compulsory in order to get a mortgage for a house. The amount to be repaid is much lower now but the premium is the same.

Not having dependents, I'm not concerned about payment on death and have no interest in it. It was a compulsory hoop to jump through to get the mortgage. Is it like house insurance where the interest of the lender is noted on the policy (and they would be on to you if your policy expired) or is it just something you are pushed to have in place at the time of taking out the mortgage but the lender is thereafter unconcerned ?

Answers appreciated, thanks.

http://www.citizensinformation.ie/en/housing/owning_a_home/buying_a_home/costs_of_buying_a_home.html

They are obliged for you to have the cover, but there is little they can do if you cancel it.

What I would say is that if you go back to the lender for any reason (change terms of contract - interest only, increase/reduce term etc), they may insist that you take one out before they will play ball.

In the past lenders didnt chase it up if people cancelled their Life policies (because the value of houses were shooting up!), but some have taken to following cancelled plans up with clients.

If you cancel the plan, they may contact you and insist that you reinstate one. If you want less cover there is nothing to stop you from taking out a new , cheaper cover. If they offer you cheaper cover, make sure to shop around as mortgage companies dont always offer the most competitive rates! All the mortgage lender cares about is that you have enough cover to clear the mortgage.

harringtonp

Thanks for that.

Paul.

Drumpot wrote: »

http://www.citizensinformation.ie/en/housing/owning_a_home/buying_a_home/costs_of_buying_a_home.html

They are obliged for you to have the cover, but there is little they can do if you cancel it.

What I would say is that if you go back to the lender for any reason (change terms of contract - interest only, increase/reduce term etc), they may insist that you take one out before they will play ball.

In the past lenders didnt chase it up if people cancelled their Life policies (because the value of houses were shooting up!), but some have taken to following cancelled plans up with clients.

If you cancel the plan, they may contact you and insist that you reinstate one. If you want less cover there is nothing to stop you from taking out a new , cheaper cover. If they offer you cheaper cover, make sure to shop around as mortgage companies dont always offer the most competitive rates! All the mortgage lender cares about is that you have enough cover to clear the mortgage.

broker2008

One of the terms of your mortgage may be to have a valid life insurance plan in force that will cover the mortgage in the event of death.

cocoa123

unclebill98 wrote: »

There is no legal need for LI but it can considerable cheaper to obtain it at a young age and earlier in the mortgage.
...
LI can be level, decreasing with the mortgage amount and can be convertible which means if you upgrade house you can take the cover with you without having to start again. This is handy cause if your young and healthy you can take this policy with you for the rest of your mortgage life.

We are taking mortgage for 13 years and won't be upgrading in the future. Mortgage broker gave us a quote for MP cover with convertible option. Is there any point to run for convertible in our case? I know convertible means you can extend the term, but 13 years is the maximum that we we can take mortgage. So seems to be meaningless option for us. Am I correct?