Life Declined Morgage protection

K

Kiwi391

Guest
Please help if you can, any infor much appreciated. put a deposit on a house and have been morgage approved but my morgage protection has been declined, signed no contracts as yet. if one company declines will they all, i suffer with asthma and did have a suicide attempt 3 years ago and was on meds and couselling etc for it but have been discharged 2 years ago from the hosital, can anyone help me with this or does anyone now an company that might give me morgage protection, loan amount 80,000.

Thank you,
 
I signed a waiver for mortgage protection with the bank I was obtaining the mortgage from. You might want to enquire about that, once you are declined it is difficult to obtain mortgage protection (you will be in a database that all assurance companies have access to AFAIK). That said, I was able to get mortgage protection 3 years later without a premium.
 
Some banks will allow you sign the waiver if you cannot get life cover, downside is you have no life cover if anything happens to you, important if there are dependents. However, needs must, check if your bank is one that has this in place, if not then you may have to consider applying to other banks who may take a waiver.
 
If the bank doesn't agree to the waiver & no other insurers will look at it, a new company called Pulse have promised to offer 'high risk' cover. We don't deal with them ourselves, but if you contact Piba (the life broker body) they should point you to a broker that does.


www.powerinsurances.ie
 
Thanks alot for that info, i did hear that my bank will not accept a waiver but will look into it, iam woundering because i applied for serious illness cover would this be the reason why i could of been declined?? Gettin afraid that my sale will fall through at this stage its one knockback after another.
 
On the Pulse policies, please note that they only offer cover for up to 10 years. If your mortgage will be longer than that then the bank may not accept a Pulse policy.

A good broker will ring around different companies for you though and see if its worth your while applying somewhere else.


www.CheaperLifeAssurance.ie
 
Thanks but the term is over 35years so thats no good. will keep tryen with a broker but dont think it is looking good for me so far as i have been told by a broker (not mine) that once your declined from one company your usually declined from the rest.
 

Different companies have different re-insurers so its not necessarily true that you would get declined everywhere just because of one. There may be scope for cover with a loading or an exclusion. It all depends on an individuals details.
 
"The lender is obliged to attempt to cover all its housing loan borrowers under the group policy,
except for categories excepted by Section 126(2) of the Consumer Credit Act, 1995, as
follows:
a) where the house in respect of which the loan is made is, in the mortgage lender’s
opinion, not intended for use as the principal residence of the borrower or of his
dependants,
b) loans to persons who belong to a class of persons which would not be acceptable to
an insurer, or which would only be acceptable to an insurer at a premium significantly
higher than that payable by borrowers generally,
c) loans to persons who are over 50 years of age at the time the loan is approved,
d) loans to persons who, at the time the loan is made, have otherwise arranged life
assurance, providing for payment of a sum, in the event of death, of not less than the​


sum referred to in subsection (1)
​
​
25.”

Under exemption (b), mortgage lenders are not required to insure potential borrowers who are
in very bad health.
It is important to note that many lenders may still insist, and are entitled to insist, as a
commercial term of advancing a housing loan, on mortgage protection cover for borrowers
who fall under the Consumer Credit Act exception (a) and (c) above.
Exemption (d) above allows borrowers to offer an individual policy, of a sufficient term and
appropriate level of cover, to a lender as security for a housing loan, instead of being covered​
​
​

by the lender’s group mortgage protection cover."​

Perhaps the above maybe of help to you as you would fall under exemption B. Quote the above to and bring your letter of refusal to you mortgage provider and ask to submit an application under their group mortgage protection policy, if the group policy will not cover you, you may not be required to take out cover.​
 
Kiwi, I'll second Barracuda's advice. 10/10 that is what askaboutmoney is about.
 
Thanks thats some re assurance, it was through the banks morgage protection provider that i was declined.
 
Usually the bank will be a tied agent of a particular life company so they go ahead and submit a regular application on the same basis as a broker would, this means that they would get a higher commision paid for a regular mortgage protection policy whereas a group policy usually attracts a lower commision as there is usually lower level of underwriting and a higher risk attached to group policies.

So in your case possible you may indeed get covered under a group policy because they would not be asking the same amount of medical questions (usually about 5) In these times banks are reluctant to give out mortgages regardless of how good the prospect is so they would not be shouting about Group Life Policies

Good luck with your new application under the Group Policy this time!
 
Hi folks,

Long time reader but first time poster.

I may have a similar problem to the OP's in that I have applied to two mortgage protection insurance providers but am doubtful that I will be offered insurance, due to a long-term medical condition for which I am on medication.

I don't quite understand Barracuda's post about 'group insurance'.

If I am refused insurance, I know that I can apply for a waiver from my mortgage provider so that I am not required to take out insurance. If I am refused a waiver, where exactly does group insurance come in? Who's group insurance, and what Act is being quoted?

Many thanks for your assistance.
 
I am not sure what that quote is from but when I last worked for major lender there was no group policy option, one existed many years ago but in recent years you could only apply through the tied agency same as any broker.
 
Yasunari the act is "Section 126(2) of the Consumer Credit Act, 1995"

A group policy may also be known as a Block Policy (same difference these days) where the mortgage provider enter's into an agreement with a life company to provide mortgage protection to its customers with little or no medical underwriting upto certain limits as defined by the agreement between the mortgage provider and the life company, although in reality all group/block mortgage protection policies that I am aware of have some level of medical underwriting in place these days. This type of policy has not been used so much in recent years as the margin on these policies is quite low compared to a regular mortgage protection policy. The owner of this policy is the lender and the lender pays the premiums and then passes the cost of these premiums onto their customers and is included in the mortgage payment and is not distinguished in the D.D. Although I have not worked in this area for a long time I am fairly certain that once a person is refused cover under the group/block policy, the lender cannot refuse the mortgage, that is why I quoted the said "act"

wbbs... while you may not have been aware that a group/block policy existed, the major lender that you worked for would have some type of arrangement in place as it is part of their licence condition's to provide mortgage products in the Irish market.

Baracuda
 
But would they not be covered by offering mortgage protection through their agency with major life companies?

I worked there for a long time up until quite recently and completed mortgage protections applications almost every day of the week and if they had a block policy they kept it very quiet. The last block policy I dealt with was easily over 10yrs ago, after that it was changed to ordinary policies that were not assigned the same way the block one automatically was and could be continued even if the mortgage was cleared or moved elsewhere.

Anyway maybe other institutions are different, the one I was with did accept waiver if required but some lenders don't have that policy.
 
Not necessarily as Group/Block policies do not have the same level of medical underwriting so while one could be refused on a independant agency policy they may be accepted under the Block policy. As you said the lender that you worked for accepted a waiver's if the person could not be accepted under a policy for that life company that they had an agency for which made perfect sence, but as we are all aware credit policy has tightened up over the last couple of years and all lenders are trying everything to reject mortgage applications regardless of how good the risk is at present.

As far as I am aware (but may be corrected) the lender can refuse an application if the person is refused under an independant policy but are compelled to issue a mortgage without mortage protection if the person is refused under their block policy.

I understand that you may be reluctant to divulge who you worked for so I would not expect you to comment on the next line.

PTSB, EBS and I think Ulster Bank have a tied agency for Irish Life for their mortgage business but they also have a Block Protection Policy in place. The reason they would not use this facility to often is for the very reasons that you outlined i.e. they can hold onto the policy if they redeem the mortgage early etc so best advice was of course to take out an independant polciy through their agency
 
Just having a look over your post again, yes the very fact that you applied for SIC cover may be a reason you were knocked back. Life companies have different contracts with different reinsurers eg a life company maybe contracted to place all their term life business with one reinsurer while if their is SIC benefits on the term insurance they may have to place all that business with another reinsurer same concept applies to mortgage protection where the level of cover reduces inline with the mortgage payments. So this means that even it your refused for one type of product you may not be refused for a different type of product.

Life companies do not take on all the risk themselfs and usually sell on up to 80% of the risk to a different insurance company so if there was a major outbreak of a disease for example in a particular country the higher rate of claims would not bankrupt that life company.
 
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A block policy is perfect for someone whose height to weight ratio is not great, i.e overweight.

Eventhough a block or group policy has a much smaller number of questions, the catch all question would usually be for occurrences in the last 5 years.

The ability to be able to , truthfully, answer "no" to the 5 questions asked will determine whether a person "qualifies" or not.

With less and less lenders left, there are fewer available options. In the latter years of the mortgage boom, lenders became super "tied agents" offering virtually no choice other than the one insurer who was offering great terms and very large commission rates because of the volume of business they gave. However the banks did have clout with the insurer for helping to get cases over the line.

Patrick
 
Thanks for the information.

It seems that group/block insurance is at least a possibility, should the worst come to the worst.

Thanks again.
 
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