Life BOI LifeCare PLan

[lucy09]

Hi ,
I am totally confused , have been paying a BOI LifeCare plan for the past three years. When we took out our mortgage we thought this was compulsory and we are currently paying €83.04 per month. We are both non-smokers and have no health issues.
When talking to my sister she said she is paying €20 a month mortgage protection. When I rang the bank I took off 'absence from work ' from our policy and this had brought down our premium to €46.98 per month. I am wondering if we just got basic mortgage protection could we cancel this LifeCare plan and as it says that our contributions are 3,600 so far could we cash in this policy??

 

[tenchi-fan]

Hi

Just because you paid in €3600 does not mean you can cash your plan in for €3600 - the cost of your cover is taken from the plan value. chances are you plan will be worth a few hundred.

The cheapest cover you can get is called joint life, decreasing term cover.

Just say your mortgage is for €200,000 over 30 years. Your initial level of cover will be 200,000 which will reduce every month approximately in line with your mortgage. If either of you die the policy will pay out and end, and the money will be used to pay off your mortgage. The premium does not change - it remains the same for the full 30 years.

The premium is determined by the amount of cover, time scale, your age, health, gender and smoking status.

You were obviously sold a much more expensive form of cover. If you believe you were mis-sold the policy you should write a letter of complaint to BOI. If they don't put things right you can make a complaint to the financial services ombudsman.

PS I took out a single life policy which only cost €13 a month. I later replaced it with one which also covered specified illnesses and it costs €25 a month.

 

[StevieC]

Life assurance in respect of the mortgage of your primary home is compulsory under the Consumer Credit Act but the policy you have been sold by the bank is a whole of life plan. These types of plan are subjected to premium rate reviews as time goes on (when I say "review" read "increase") and are in my opinion not suitable for furfilling basic compliance with the Consumer Credit Act as the policy is open ended and quite frankly expensive.

If you just want to cover your mortgage, a term policy like the one tenchi-fan described is the cheapest way to go. Bear in mind also that you are not obliged to take out this insurance with Bank of Ireland, you can shop around to get the best price and then assign the policy to Bank of Ireland for mortgage purposes. Once you have new cover in place and the policy assigned you can cancel the Lifecare policy if you wish.

There will probably be a surrender value on the Lifecare plan but it wont be anything like what you paid in as the life assurance costs will be deducted.




www.CheaperLifeAssurance.ie