Can you have more than one life insurance policy?

Sunrise_Sunset

I need a new policy for my mortgage but I already have a level term policy that I would like to keep, unfortunately it's one year shorter than the new mortgage.
I was thinking of keeping the level term policy, and then taking out a mortgage protection policy for the new mortgage.
Is this possible?

...

micar

Sunrise_Sunset wrote: »

I need a new policy for my mortgage but I already have a level term policy that I would like to keep, unfortunately it's one year shorter than the new mortgage.
I was thinking of keeping the level term policy, and then taking out a mortgage protection policy for the new mortgage.
Is this possible?

You may be able to extend the term of your existing policy. Contact the company to see.

Considering you've a level term assurance rather a decreasing term assurance, the level of cover is sufficient to cover the mortgage amount.

In the event of death, the sum paid to the bank clears the mortgage with the balance paid to the estate

Mr.S wrote: »

Yes.

You just can't claim the full amount from multiple insurers, the payouts are split.

Not quite correct.

You can have multiple life policies.

You can have one specifically covering the mortgage and another which would be paid to your estate on death.

When setting up a new policy, you might need to disclose other policies you have. Questions might be raised on a person earning €40k taking out policies of say €500k with multiple insurers. .. .particularly if your taking out a joint life policy I.e. one that covers 2 people.

Sunrise_Sunset

micar wrote: »

You may be able to extend the term of your existing policy. Contact the company to see.

Considering you've a level term assurance rather a decreasing term assurance, the level of cover is sufficient to cover the mortgage amount.

In the event of death, the sum paid to the bank clears the mortgage with the balance paid to the estate



Not quite correct.

You can have multiple life policies.

You can have one specifically covering the mortgage and another which would be paid to your estate on death.

When setting up a new policy, you might need to disclose other policies you have. Questions might be raised on a person earning €40k taking out policies of say €500k with multiple insurers. .. .particularly if your taking out a joint life policy I.e. one that covers 2 people.

Our insurer told us we can't extend the policy as it was taken out before 2012. Our new mortgage runs about 18 months longer than our policy. This is something that was just brought to our attention this week by our mortgage advisor. Apparently with a tracker portability they round up by a year. We weren't very happy about it, but we don't have time to get a new loan offer sorted before our closing date in 2 weeks time.
So, you're saying we can keep our level term policy that's currently in place for X amount. This is a life insurance policy. And we can can take out a mortgage protection policy, a decreasing one for Y amount for our new mortgage, to satisfy the bank that this is covered. In the event of one death, the new policy will pay out Y amount to cover the mortgage, and the original policy will still pay out X amount too?

Sunrise_Sunset

micar wrote: »

When setting up a new policy, you might need to disclose other policies you have. Questions might be raised on a person earning €40k taking out policies of say €500k with multiple insurers. .. .particularly if your taking out a joint life policy I.e. one that covers 2 people.

The original level term policy is for 317k.
A new mortgage protection (decreasing) would be for 268k.
Family income about 81k.

antix80

Op, the last year of a mortgage life assurance policy would only cover a few thousand. Bear that in mind before paying an extra €13 a month for the life of the mortgage.
See if your bank will waive the requirement and accept your existing policy.

Or maybe stick a few thousand in a life assurance investment and assign it to the bank.

Mr.S wrote: »

You just can't claim the full amount from multiple insurers, the payouts are split.

Wrong.

Sunrise_Sunset

antix80 wrote: »

Op, the last year of a mortgage life assurance policy would only cover a few thousand. Bear that in mind before paying an extra €13 a month for the life of the mortgage.
See if your bank will waive the requirement and accept your existing policy.

Not a bad idea. They've been such sticklers about everything so far though, I wouldn't have huge confidence they'd go for it, but I think it's worth asking the question.

The J Stands for Jay

Mr.S wrote: »

Yes.

You just can't claim the full amount from multiple insurers, the payouts are split.

Your estate will get the full amount from all your policies

Sunrise_Sunset

McGaggs wrote: »

Your estate will get the full amount from all your policies

So we can have both policies and they will both pay out in the event that one of us dies during the term? I just need to make both insurers aware that there's 2 policies?

The J Stands for Jay

Sunrise_Sunset wrote: »

So we can have both policies and they will both pay out in the event that one of us dies during the term? I just need to make both insurers aware that there's 2 policies?

When you're applying for the mortgage cover, they'll ask about other policies you have. They use that to see if you're taking out an inappropriate amount of life cover, like earning 25k a year, but looking for 2m cover. Once they're satisfied on that, they don't care about other policies.

You can have both and they'll both pay out.

Sunrise_Sunset

McGaggs wrote: »

When you're applying for the mortgage cover, they'll ask about other policies you have. They use that to see if you're taking out an inappropriate amount of life cover, like earning 25k a year, but looking for 2m cover. Once they're satisfied on that, they don't care about other policies.

You can have both and they'll both pay out.

No, we're not insuring millions. Less than 600k between the 2 policies. Is this likely to cause any issues?
One thing that we do like about the the possibility of a new policy is the option of getting conversion (although I think we would need a level term policy for that rather than a decreasing policy, but please correct me if I'm wrong). Our original policy doesn't have that, it will end in 22 years regardless.
We have 2 kids, and I'm a SAHM, we just want to make sure that we are all covered should anything happen.

antix80

Mr.S wrote: »

In that case, why doesn't everyone take out multiple policies if each will 'cash out' the the holders estate in full?

Why spend all your spare cash on life assurance?

Henry Ford III

Mr.S wrote:

You just can't claim the full amount from multiple insurers, the payouts are split.

Nonsense. It's life assurance were talking about here. You can have as many policies as you like and they will all potentially pay out in full in the event of a claim

micar

Sunrise_Sunset wrote: »

Our insurer told us we can't extend the policy as it was taken out before 2012. Our new mortgage runs about 18 months longer than our policy. This is something that was just brought to our attention this week by our mortgage advisor. Apparently with a tracker portability they round up by a year. We weren't very happy about it, but we don't have time to get a new loan offer sorted before our closing date in 2 weeks time.
So, you're saying we can keep our level term policy that's currently in place for X amount. This is a life insurance policy. And we can can take out a mortgage protection policy, a decreasing one for Y amount for our new mortgage, to satisfy the bank that this is covered. In the event of one death, the new policy will pay out Y amount to cover the mortgage, and the original policy will still pay out X amount too?

Did they provide a reason why ... reassurance issue? Gender directive ?

Yes.......both X and Y will be paid to the lender any balance will be paid to the surviving life assured by the bank.

Henry Ford III

McGaggs wrote:

When you're applying for the mortgage cover, they'll ask about other policies you have. They use that to see if you're taking out an inappropriate amount of life cover, like earning 25k a year, but looking for 2m cover. Once they're satisfied on that, they don't care about other policies.

Life assurance proposal forms only asks about cover affected in the last 12 months.

You'd need to have a substantial level of cover before an eyebrow would be raised.

Financial underwriting only kicks in at relatively high levels of cover.

Henry Ford III

micar wrote:

Did they provide a reason why ... reassurance issue? Gender directive ?

Term policies aren't flexible normally. Insurers want new business.

Sunrise_Sunset

Great responses.
Thanks all.