Mortgage Protection policy

jos_kel

Long story short.
Took out mortgage with ICS in 2005.
So obviously had mortgage protection policy on this.
Switched mortgage to Danske in 2008.
so had another mortgage protection policy on this.
Recently received a letter to say ICS no longer 'had an interest' in their policy.
Correct me if I'm wrong but their interest should have ceased in 2008?
Will give them a call?
Is a refund in order?

PaulM1977

Has the premium been coming out of your account for the policy with ICS since 2008 or did you cancel it with the life assurance provider and/or your bank?

Thanks,

PaulM

phormium

If it is still in place and you have been paying it then you are unlikely to get a refund. Both policies would have paid out on death unlike say house insurance where you would get a refund if you were double insured as both would not pay out.

If both policies are with the same life company and you had specified on taking out the second one that the first was to be cancelled then there would be some hope of a refund if the company had not acted on your instructions.

Neither bank could have cancelled the existing policy on your behalf, you have to cancel a policy yourself.

ICS still having an interest noted, which is a term more usually applied to house insurance, with mortgage protection the lender normally assigns the policy to themselves, is neither here not there and has had no impact on the policy.

jos_kel

PaulM1977 wrote: »

Has the premium been coming out of your account for the policy with ICS since 2008 or did you cancel it with the life assurance provider and/or your bank?

Thanks,

PaulM

The premium had been coming out of my bank account.
Irish life told me that on Danske's proposal in 2008, they stated that the mort protection policy was 'not to replace'.
I guess this answers my question, perhaps it was in addition to the one we had with ICS.
However why would ICS have an interest in a mortgage of 0 in 2008.

phormium

It wouldn't have come to their attention in the intervening time, they probably got correspondence lately from the insurance company that prompted them to check it and discovered the mortgage was cleared off.

jos_kel

phormium wrote: »

It wouldn't have come to their attention in the intervening time, they probably got correspondence lately from the insurance company that prompted them to check it and discovered the mortgage was cleared off.

What's puzzling me though is this ....,
A previous poster said that with mortgage protection you can have 2 policies and both will be paid in the event if death.
That's fine so far.
However, if the onus was on us to cancel the ICS policy in 2008 when we moved to Danske. Was the onus not also on us to declare 'no interest' in the policy.
Why after 7.5 years are ICS now declaring no interest in it or why did they have an interest in it at all?

phormium

No, you couldn't remove the bank's interest in a policy without their consent. They effectively had a hold over the policy because you owed them money. The insurance company would not remove it on your say so only without the lender's approval. The issue of their interest being noted would have arisen if you had tried to cancel it and the bank would have to confirm to the insurer that they had no further interest in it.

They are removing it now because they have obviously discovered your loan is repaid, it has had no impact on the policy other than it would have had to be sorted if you had died as they were named and would have had first call on the money. However you owed them nothing so it wouldn't have been an issue other than a bit of paperwork.

You didn't die so it doesn't matter, you can now decide whether or not to keep on the policy or cancel it.

jos_kel

phormium wrote: »

No, you couldn't remove the bank's interest in a policy without their consent. They effectively had a hold over the policy because you owed them money. The insurance company would not remove it on your say so only without the lender's approval. The issue of their interest being noted would have arisen if you had tried to cancel it and the bank would have to confirm to the insurer that they had no further interest in it.

They are removing it now because they have obviously discovered your loan is repaid, it has had no impact on the policy other than it would have had to be sorted if you had died as they were named and would have had first call on the money. However you owed them nothing so it wouldn't have been an issue other than a bit of paperwork.

You didn't die so it doesn't matter, you can now decide whether or not to keep on the policy or cancel it.

Maybe I'm being silly here but we didn't ICS anything in 2008 or now? The policy has already been cancelled by me a few weeks ago.

phormium

Yes they had no actual interest in your policy since you cleared the loan but only now the paperwork is catching up with that fact. In fact it's surprising it even arose at this stage, their interest could have remained on that policy until you either claimed or cancelled.

It isn't really any big issue, had you cancelled the policy when switching the mortgage then this would have come to light at that time and been sorted out. The fact that the policy remained in effect meant it wasn't flagged by anyone. It wouldn't be a usual part of bank follow up when a mortgage is cleared and more usually it is the customer who would instigate the updating when taking out their new policy or reviewing policies.

Henry Ford III

You should have cancelled the ddm in 2008 OP.