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All the payment protection extras - query?

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  • 12-07-2011 1:47pm
    #1
    whatdoicare
    Registered Users Posts: 2,398 ✭✭✭


    Heya, myself and the hubby have a mortgage of 180,000 and our fixed rate is up this month - we got a letter in the door and basically it says we are paying 176.00 a month in payment protections ie: life assurance & payment protection

    To me this feels like an awfully high amount and we can't really justify it but we want to make sure that if something happens to MR whatdoicare that we're not both out on the street. We worked it out that we'll have paid nearly 64,000 to Irish life by the time our mortgage is done if we never need to use it!

    We have booked an appointment to chat to Irishlife -who are providing this but we're not too sure what exactly we really need and what we can trim the fat on without cutting our nose off to spite our face.

    So, main question - what exactly do we need and what, realistically should we be paying? (Sorry if this sounds like a stupid question but we're a bit dense when it comes to this sort of thing)


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    #2
    Pablo Sanchez
    Closed Accounts Posts: 1,207 ✭✭✭Pablo Sanchez


    The life cover is the only thing you are obliged to have. Rates are competitive at the moment, a new quote for decreasing term assurance may be cheaper then what you have at the moment. Without knowing the details your life cover may simply be high due to smoker status or a loading due to ill health.

    Mortgage protection (Payment Protection Insurance) is not compulsory. it is an expensive insurance but could be very usefull when you really need it. I would advise that you read the terms and conditions WITH A FINE TOOTHED COMB to be sure you are happy to continue with it. These policies can have numerous get out clauses.

    You may want speak to your advisor regarding income protection. This will provide you a replacement income in the event that Mr or Mrs is unable to work due to any acident/illness/injury. It can continue to pay a benefit until retirement so could be very worth while. It does not provide cover in the event of redundancy so discuss with your advisor before deciding to replace your payment protection with it.


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    #3
    bailes
    Registered Users Posts: 52 ✭✭bailes


    As previously advised the only compulsory element of the cover that you need is mortgage protection.

    If you are dealing with Irish Life direct instead of a broker it is likely to be more expensive.

    Does this policy have any of the following, serious illness cover, conversion option, indexing option, hospital cash? there are loads of bells and whistles that can be added to a standard policy that you may not want and are costing you money.

    The premium quoted does seem excessive so be careful with the explanations given by Irish Life.

    In relation to the Income protection, this is tax deductible are you claiming the tax back?

    Without knowing all the relevant details it's hard to give accurate advice or comparisons.

    P.M. me if you want a more definitive recommendation.


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