Mortgage protection - mental health questions

K

Kerry78@

New Member
Messages
4
Hi.

I am a complete newbie to the whole mortgage stuff, and already in my mid 40ies.. so time is ticking for me and my partner to apply for a mortgage in the coming months.

I just figured that for a mortgage, we'll need life insurance, and for that there'll be some questions asked obviously.. so I've a history of an eating disorder (non other specified) and self harm for both I've been inpatient in a psych unit in around 2007. I was also on different medications at the time.

That spell lasted a few month I guess, but I have since made a full recovery and went on to become a nurse (which I still am). At the time (2009), I got a handwritten letter by my psychiatrist that I'm in remission and fit to start the nursing degree course (they required that at the start of the course). So I have that.. and no further mental health issues since then.

I also already have a life insurance policy, which I took out a good few years ago, but it's only to secure my son financially should I die, and it cannot be converted into mortgage protection.

What do you guys think..?? Will it be very difficult to get life insurance for a mortgage? Very worried re this as we're under pressure to get on the ladder asap.. thank you..
 
Ask for hard copy application forms from a couple of mortgage protection insurance providers and see what questions they ask. Or ask for them in your nearest brokers
 
I don't know whether it will be a problem or not, there is surely going to be a question on the forms that this will be relevant for but start in time looking for the cover as any queries which are likely to need doc reports etc can cause delays. Not everyone can answer No to everything on the form so reports to docs etc are commonplace enough but slow up things!

Next the issue you can run into is that you are not given cover or it is substantially loaded with a higher price, from that point of view it is important to check with any potential lender that they are open to doing a waiver for life insurance should the need arise. It's not ideal obviously from your family point of view but it shouldn't stop you getting a mortgage once the lender is open to a waiver. There are provisions in place for people who cannot get cover under the relevant consumer act but a bank is not obliged to offer this option but some do.

An important point is that even if the bank allows a waiver that does not stop you continuing to try and get some level of cover in place, sometimes a person who can't get cover for example say 300k over 30 yrs affordably can get 100k over 10yrs that they can afford so while that doesn't satisfy the lender and is why they would need to do a waiver it is a bit of a comfort family wise to have some level of cover in place.

Finally, your existing policy, you say it can't be used for the mortgage, I'm assuming that is because the term and amount don't cover the proposed borrowing?
 
Monbretia said:
I don't know whether it will be a problem or not, there is surely going to be a question on the forms that this will be relevant for but start in time looking for the cover as any queries which are likely to need doc reports etc can cause delays. Not everyone can answer No to everything on the form so reports to docs etc are commonplace enough but slow up things!

Next the issue you can run into is that you are not given cover or it is substantially loaded with a higher price, from that point of view it is important to check with any potential lender that they are open to doing a waiver for life insurance should the need arise. It's not ideal obviously from your family point of view but it shouldn't stop you getting a mortgage once the lender is open to a waiver. There are provisions in place for people who cannot get cover under the relevant consumer act but a bank is not obliged to offer this option but some do.

An important point is that even if the bank allows a waiver that does not stop you continuing to try and get some level of cover in place, sometimes a person who can't get cover for example say 300k over 30 yrs affordably can get 100k over 10yrs that they can afford so while that doesn't satisfy the lender and is why they would need to do a waiver it is a bit of a comfort family wise to have some level of cover in place.

Finally, your existing policy, you say it can't be used for the mortgage, I'm assuming that is because the term and amount don't cover the proposed borrowing?
Click to expand...
Hi, thanks for your detailed response..

To be honest, that life insurance I have - I was a single parent at the time I took it out, and only wanted it to cover my son financially if I die.. so it is in his name only, but the mortgage will be a joint one with my partner. As far as I'm aware, the life insurance I do have in place is pretty useless, as it's low monthly payments and covers "only" 200 k, and I can convert it to a longer term with no additional medical exam once it ends (which will be when I'm my 60ies), but it doesn't have the option of any payout if I don't t die..
 
BlackandBlue said:
Do you as a nurse have death in service benefit?
If so it might help.
Click to expand...
No it won't. Death in service benefit is written under trust and can't be assigned.

The issue happened 17 years ago and you have no history since. You will have to disclose what happened, give as much detail as possible. The life company will probably look for more details from a medical doctor. This can take time, especially if it was so long ago, so don't leave it to the last moment. And don't even think about not disclosing it to get it through quicker. It only increases the chances of no pay out being made at all. At 17 years ago, with no record since, you will get cover.


Steven
www.bluewaterfp.ie
 
Steven could you expand on your answer about death in service benefit. What does ‘written under trust and can’t be assigned’ mean in practice for HSE employees.
 
@Kerry78@

Just be aware that any self declaration could well prompt requests for medical records by a provider.

Passage of time, and general poor records management in the Irish health service, mean that the process could take a long time. Records might even be incomplete or missing.

Irrespective of this I would make several applications to different providers to get best value.
 
While any death in service benefit cannot be assigned to a lender it can be a factor in their decision whether or not to allow a waiver if required as it provides a certain level of 'comfort' to the lender that there is some cover in place. Same could apply to existing policy if it's not totally ringfenced for son.
 
Sounds like you haven't got Mortgage approval yet; you should start this process. When you get approval you'll need to get mortgage protection. Different insurance companies will have different procedures for checking your medical history. Some will write to your doctor and ask them to complete a PMA (Private Medical Attendants) Report and others will request that you undergo a medical examination.
The Bank (mortgage provider) are taking on the credit risk of the loan and the risk that you die before the mortgage is paid off is 'outsourced' to the Insurance company. As mortgage protection is mandatory (except where a waiver is allowed) many people will have faced your 'dilemma'.
Your medical issues were a long time ago and you have been ok since, you should be ok. Be upfront and it should work out.
 
Kerry78@ said:
Hi.

I am a complete newbie to the whole mortgage stuff, and already in my mid 40ies.. so time is ticking for me and my partner to apply for a mortgage in the coming months.

I just figured that for a mortgage, we'll need life insurance, and for that there'll be some questions asked obviously.. so I've a history of an eating disorder (non other specified) and self harm for both I've been inpatient in a psych unit in around 2007. I was also on different medications at the time.

That spell lasted a few month I guess, but I have since made a full recovery and went on to become a nurse (which I still am). At the time (2009), I got a handwritten letter by my psychiatrist that I'm in remission and fit to start the nursing degree course (they required that at the start of the course). So I have that.. and no further mental health issues since then.

I also already have a life insurance policy, which I took out a good few years ago, but it's only to secure my son financially should I die, and it cannot be converted into mortgage protection.

What do you guys think..?? Will it be very difficult to get life insurance for a mortgage? Very worried re this as we're under pressure to get on the ladder asap.. thank you..
Click to expand...
Hi Kerry78@

Am I right in thinking that you secured life assurance since you had your eating disorder? As it was to secure your son in the event of your death, I am assuming that the life assurance was written on your life. Is this correct?

If so, it looks like you have a Convertible term assurance (you say in a later post that you can convert it without medical evidence at the end of the term). If this is so, and you disclosed your eating disorder when you took out your life assurance, you have already proved that you are insurable)

Convertible term assurance is a lot harder to secure than Mortgage protection. One allows you to convert to a new policy without medical evidence, the other decreases over the term of the contract so with each passing year you are less of a risk to the insurance company.
 
Mamamia22 said:
Steven could you expand on your answer about death in service benefit. What does ‘written under trust and can’t be assigned’ mean in practice for HSE employees.
Click to expand...
Nothing to do with HSE employees. It is not yours, it is the trusts for your benefit. You cannot give a lender priority over it.

and why would a bank accept it anyway? If you left your job, you lose the benefit.
 
Kerry78@ said:
Hi.

I am a complete newbie to the whole mortgage stuff, and already in my mid 40ies.. so time is ticking for me and my partner to apply for a mortgage in the coming months.

I just figured that for a mortgage, we'll need life insurance, and for that there'll be some questions asked obviously.. so I've a history of an eating disorder (non other specified) and self harm for both I've been inpatient in a psych unit in around 2007. I was also on different medications at the time.

That spell lasted a few month I guess, but I have since made a full recovery and went on to become a nurse (which I still am). At the time (2009), I got a handwritten letter by my psychiatrist that I'm in remission and fit to start the nursing degree course (they required that at the start of the course). So I have that.. and no further mental health issues since then.

I also already have a life insurance policy, which I took out a good few years ago, but it's only to secure my son financially should I die, and it cannot be converted into mortgage protection.

What do you guys think..?? Will it be very difficult to get life insurance for a mortgage? Very worried re this as we're under pressure to get on the ladder asap.. thank you..
Click to expand...
I've been through a somewhat similar experience - looking for a mortgage and life insurance in my mid 40s with a number of medical issues (including mental health). My advice is to get a few quotes from brokers - life insurance companies etc. Their baseline rates (that they apply if you have a perfect medical history) were all very similar, but the percentage loading based on their assessment of my medical history was very different. I got three quotes - €80pm, €102pm and €135pm - that's a difference of €15k over 25 years! The baseline rate for each was around €45pm.
Process wasn't too bad - I disclosed everything, all three got information from my gp and that was it.
My second bit of advice is do this ASAP. I can take a while. Especially if your GP drags their heels or they want additional information from consultants etc.
 
You must log in or register to reply here.
Back
Top