Mortgage protection query

Helen321

Registered User
Messages
33
Hi

I have been reviewing my finances and my mortgage protection policy indicates that I also have accelerated specified illness cover. I assume that this is an additional cost. My premium is €78 per month on a mortgage of €161k so I thought that I could get rid of the accelerated illness cover and reduce the monthly premium. The insurance company have emailed me to say that this cannnot be done and that I would need to speak to a broker about getting a new plan. My questions are:

Is accelerated illness protection a normal part of a mortgage protection policy or is it an added extra? (I have good cover with work so I feel this is not necessary for me)
Is it complicated to change a mortgage protection plan?
Am I likely to save money if I do change?


many thanks
 
Helen, if having examined your policy document you decide serious illness cover is not required then go back to your existing company and ask them to remove it. Some companies may be able to do this (internally they rewrite the policy) but others can't because they have locked in at a guaranteed rate and can't break out of it. Serious illness mortgage protection rates increased substantially over the past few years so if you took out your policy a few years back be careful as it may be offering you very good value for money compared to what you would have to pay for the exact same policy taken out today. If you are in good health with no adverse medical history then it is not complicated to downgrade and change policies. Be careful as there are many who encourage churning with little consideration for your interests because it gets them uplift commission. If in doubt get independent financial advice. The financial regulator produces a fee booklet which they will post out to you request.
 
In relation to mortgages you only need two types of insurance, house insurance and life insurance. The cheapest life insurance is what's called term insurance. The amount to be repaid decreases as does your mortgage which is why it is the cheapest.
Most mortgage protection/illness insurances are worthless as they have too many get out clauses and statistically are a real money spinner for those who sell them and those who provide them.
 
Correction to your well meant post Bronte - the cheapest form of life assurance is a product called mortgage protection. Mortgage protection is a type of term assurance where the sum assured reduces each year to nil at the end of the term. Mortgage protection is the cheapest way to cover a repayment mortgage. Mortgage protection does not have many get out clauses.

Bronte may be trying to warn people about mortgage repayment protection policies (sold as covering redundancy) or serious illness policies (sold as covering illness but only covers specified illnesses)
 
Thanks a million for the responses. I have contacted the company who the policy is with to see could it be downgraded to just mortgage protection but no joy with them
Going to shop around a bit now and see if its worth my while to move the policy.


many thanks
 
It probably will be worth your while, my mortgage protection is one sixth the monthly cost of yours.
 
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