Mortgage insurance and change in health status

Aoife_82

Hi, I never understood how mortgage protection works in case someone becomes seriously ill or dies.

I mean, when you apply for a mortgage, you have to answer a number of questions regarding your health status and based on that the insurance company gives you a quote.

What I don't know is what happens if, after taking out the mortgage (and the mortgage protection), I becomes ill or develop a condition: do I have to contact the insurance company? Would they increase the premium? What if I die for an illness I've developed after taking out the insurance?

I've tried to search online but I couldn't find an answer to these questions

Thanks

phormium

You take out the insurance based on the situation at that point in time health wise assuming you were totally honest etc in medical answers and that is the really important bit.

You don't need to tell the insurance company if you develop some sort of illness unless it is something that is going to give rise to a claim, for example if you had critical illness cover as part of your policy and you had a heart attack, then you would be putting in a claim on the policy.

If you die someone will contact the company for the payout

Even if you got sick and told them they are not going to increase the premium, it's not relevant as the price was set based on the risk at the time of taking it out. It could affect any new policy you were taking out but an existing one won't change.

Aoife_82

Thank you for the clear answer: FINALLY!