Mortgage Payment Protection

A

apd

Registered User
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Hi,

I have pp insurance deducted by DD with my mortgage repayments with AIB. It seems to be about 30-40 euro pm.

I have recently completed probation with a new employer that has an "Income Continuance Plan", where the payable amount is 66% (two-thirds) of basic salary, less the Social Welfare disability benefit.
The insurance cover and any benefit which is payable or being paid will cease at your normal Retirement Date
payment of benefit will only commence after 26 consecutive weeks of absence from work.

Do i really need pp insurance?

Thanks
 
No. PP insurance on loans is seriously over priced and a highly profitable business for the Banks. Once you are in stable employment there would normally be no need for this insurance. Even if you are considering it you can buy policies with higher benefits, greater flexibility and lower rates directly from competing companies. Having been involved in selling these Bank policies for a number of years I do not see any intrisic benefit in them for borrowers.
 
will the bank let me cancel this policy easily without penalties
 
There is no requirement for this type of cover in the first place. It is likely that you were "sold" the cover at the time you took out the mortgage. In any event, cover is usually short-term, eg, up to one year, after which time you must find alternative funding anyway, and is usually very poor value. There will be no penalties by the bank, just decide whether you need it or not, and I anticipate that you probably don't!

On the other hand, life protection is required by lenders, and if the bank sold you a life policy too, either mortgage protection (reducing cover over the term) or level term cover, it may be worth checking if you are still getting the best value. To do this, simply speak with a broker, or try a discount broker and compare prices. I think Tesco are quite cheap for life cover!
 
Onr thing I would say is that you should be wary of with these income continuance plans - I have had my fingers burned with Friends First - it was PHI policy which is similar to IC. They have refused to pay me for the past 4 years, even though I am certified as unfit for work by my GP & several specialists. I know of others this has happened to too - so in my opinion, these plans are not all they're cracked up to be.:mad:
 
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