Life mortgage protection issue

molly14

Registered User
Messages
4
Hi.

A bit of a scenario here.

Myself and other half are in the late stages of buying a house, deposits paid, our side of contract signed, engineer inspection complete..etc.

Now we applied for mortgage protection however 2 years ago her mother had a stomach problem which required surgery(not cancer and problem solved now) and after speaking with her gp, the other half requested a gastroscopy as there is a slight chance the condition was genetic. She is now awaiting this test which will be possibly another 3 months.

We initially applied for mortgage protection but she was told she could not sign up until they have the results of the test.

Taking into account that she is perfectly healthy and requested this test herself, we are now thinking of applying to a different company, not disclosing that she is awaiting the test.
We then plan to pay the monthly repayments just to get basic cover to satisfy the lender. However obviously we are aware the policy will be void. We are doing this with the sole intention of just ticking a box to complete the house purchase.
By doing this we stand to make no gain and we will cause no loss.

When the test has been completed we then plan to cancel this policy and approach the original company, declare everything truthfully and take out full and proper cover.

I'm satisfied that this is not illegal unless we attempted to claim.

1) how likely is it the insurance company will contact the gp?
2)if we go ahead with this plan, will it have any affect on the new policy we intend to take out in 3 months?
3) Is this a bad idea, is there a better way of doing it.

Keeping in mind it's 3 months and we are fully confident the test is clear. We are too deep in the house purchase and stand to lose a couple of thousand if we don't think of something.

Thanks
 
Request that your lender allow both of you sign a waiver of her cover on the basis that she is unable to get it at this point in time, all banks can do this, whether they will or not depends on the individuals bank's policy. If they let you do this you can then just go ahead with the policy when the test is done.
 
I will enquire about that. They weren't really forthcoming with that information when they declined her. Thanks for reply
 
But I presume it was the insurance company that declined her, the waiver is a bank issue, nothing to do with the insurance company so they would not have advised you of that option.
 
I would not go down the road of not disclosing on a life application. Insurance companies can share information and you could be walking into a murky world with your mortgage provider. Also, policies like these can often get left on the long finger & if the worst happened and someone died, you could be exposing your family to a financial as well as a personal disaster.
Contact a reputable broker and ask them to ring around the different insurance underwriting depts. and see what the reaction to your case is. They may also have access to specialist insurers that can offer various options.
 
If it were me I would just get insurance online, perhaps via an execution only broker. I wouldn't volunteer anything about mother-in-law and I would be vague on any request for family history. There may be no need to cancel the policy in 3 months. I sounds like there is nothing to the stomach issue and that it's got nothing to do with either of you.
 
Trouble is applicant may already be on the insurance register from previous application.

Even if they took out a policy without informing company of proposed test and the results were clear it would still be non disclosure and could easily invalidate the policy in the event of a claim for even an unrelated event some time in the future. Pointless lying to insurance companies, they will investigate, their aim in life is not to pay out if possible.
 
Pointless lying to insurance companies, they will investigate, their aim in life is not to pay out if possible.
There is no lie. The stomach issue is a non-story. I would be shocked if this 'omission' raised any flags. The point is to not hold up the house purchase, whether there would be a question mark over a future payout is not relevant to that. Once the house purchase is complete they could return to the insurance company to clarify the non-issue, if desired.
 
It's a pending test, the original insurance company thought it important enough not to quote.

I would be very slow to omit anything. I dealt with a mortgage/insurance case where the applicant had between the time of applying for the insurance (when he was fine) and drawing down the mortgage and activating the policy which was months later went to his doctor with a minor issue, he had private insurance and his doctor sent him for a test which showed up nothing. He didn't advise the insurance company of this doctors visit or test when drawing down the mortgage and activating the policy. Roll on two years and he was diagnosed with a cancer that he subsequently died from, the insurance company would not pay out citing non-disclosure even though there was no evidence from the test done that there was any problem. I felt it was very unfair as even if he had disclosed the visit and the clear result of the test it would have had no effect on the risk or premium. I advised the widow to take it to the Ombudsman which she did but the view of the insurance company was upheld and there was no pay out. Widow left with mortgage she was unable to pay, you can't be careful enough with insurance!

The bank waiver will solve the problem of the immediate need to draw down, that would be the better option. One of the boxes on the waivers is specifically for when a policy is postponed or declined which covers this applicant.
 
Hi lads, op here.
Monbretia, I believe this is good advice but my concern is that if I go to the bank, explain that we can't get insurance at the present time and still get refused the waiver then it eliminates any other possibility of arriving to them with insurance 5 days later...etc.

Michaelm, thanks for your reply. This is more or less what I'm swaying towards doing now but still going ahead and cancelling the policy at a later date, transferring to a new company and disclosing everything, just in case...

But how likely are first company to write to her gp(if we say nothing on the form about waiting for tests etc).

And if we choose to go with this plan, god forbid anything were to happen in 5 years time, would the second insurance company (the new one in 3 months that we disclose everything to) pay out or would they somehow try check with our previous insurance company(the 3 month one). Getting confusing :/
 
The bank waiver will solve the problem of the immediate need to draw down, that would be the better option. One of the boxes on the waivers is specifically for when a policy is postponed or declined which covers this applicant.
My concern would be that the bank would use the excuse of no insurance to withdraw the mortgage offer.
 
There is a risk that the bank won't allow you go ahead with the waiver, some banks are more receptive to this than others, UB for example I have always found have no issue in general with waivers.

The bank won't bat an eye if you turn up a week later with a policy, all you need tell them is you got it sorted.

The new company won't write to your doctor as a matter of course if it is a clean application, however I don't know at what stage the original company registers the info on that application and if that would show up when the second company basically googles your name on whatever system they use.
 
There is no lie. The stomach issue is a non-story. I would be shocked if this 'omission' raised any flags. The point is to not hold up the house purchase, whether there would be a question mark over a future payout is not relevant to that. Once the house purchase is complete they could return to the insurance company to clarify the non-issue, if desired.

That is just incorrect. She is undergoing tests, so it is a very real story. No underwriter will sign off on a case while there is outstanding medical tests. They will always wait for the results.

Not telling them is non disclosure of a material fact and they policy may be void as a result.

Insurance companies do not share information and the register that was in place is now gone. You have to actively give them permission to seek information from other insurers (it's a tick the box on the form).

Back to the OP, you cannot ask people whether it is a good idea to lie to an insurance company and risk voiding a policy. You know it is the wrong thing to do. If you want to lie to them, just do it but don't go telling people about it.


Steven
www.bluewaterfp.ie
 
Back to the OP, you cannot ask people whether it is a good idea to lie to an insurance company and risk voiding a policy. You know it is the wrong thing to do. If you want to lie to them, just do it but don't go telling people about

I was basically assessing the risk, trying to solve a short term problem which is getting a mortgage over the line.
I then wish to correct the problem in the near future and was again, only getting information to make sure that's possible...
 
I was basically assessing the risk, trying to solve a short term problem which is getting a mortgage over the line.
I then wish to correct the problem in the near future and was again, only getting information to make sure that's possible...

...and the solution to the short term problem is lying to the insurance company.

The risk is that your partner dies (anyone can be in an accident at any time) and the insurance company doesn't pay out. Then you have a mortgage that you have to pay for yourself on one income.

Have you spoken to the estate agent about this to see if the vendor is willing to wait a few months?
Is there any way of hurrying up the medical results?
Have you tried to get the bank to accept cover for just you?


Steven
www.bluewaterfp.ie
 
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