Life Excessive Life Insurance premium?

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plaid

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Hi all, I would appreciate any thoughts or advice.

Firstly, does 152 euro a month sound excessive for life insurance and critical illness cover mortgage protection plan on a mortgage of 320,000?

Secondly, how difficult is it to switch life insurance companies (for purposes of mortgage protection) at age 45, female, non-smoker?


Thanks.

Plaid
 
You'd also need to post if you are the only person covered on the policy/mortgage and how many years are left.

If it's just you and there are 20 years left on your mortgage, the premium you quote sounds about right for €320,000 life cover & €320,000 specified serious illness cover, decreasing with your mortgage balance.

I think the question might be if it's necessary for you to have your entire mortgage paid off in the event of getting a serious illness? Depending on your job and how long you would be paid if you were off work sick, you might find that Income Protection and basic life assurance cover might work out cheaper. The number of potential illnesses covered is greater with Income Protection than Specified Serious Illness cover and the premium is allowable in full for tax relief at your highest rate.

It's not terribly difficult to replace one policy with another - apply for the replacement first and get it up and running, then cancel the old. Your lender may or may not want to take an assignment over the new policy - you'd have to check with them.

Liam D. Ferguson
 
Thanks LDF.

It is only for me.

The serious illness cover is for 150,000, the policy also has an encashment value, currently 7,000 euro, projected value in 2019 is 16,000. There is 19 yrs left in the policy. Is that still relatively good value? Also is the portion for illness benefit allowable against tax? (I am P.A.Y.E. worker).
 
It sounds like you have a reviewable whole of life policy. I don't like such policies for a variety of reasons: -

  • The premium can be reviewed, typically after 10 years, then each subsequent five years and when you reach seventy, annually.
  • You don't know how much of your €152 per month is paying for the cover and how much is being invested. The cost of the cover increases as you get older without your being aware of it and if the cost of cover gets to be greater than €152 per month, it can start eating into your fund.
  • If your mortgage balance is decreasing, why is your cover not decreasing? Do you have dependents?
A basic decreasing term 19 year Mortgage Protection policy should cost you under €35 per month and will cover your mortgage. If you need personal cover, e.g. serious illness or income protection, keep it seperate and transparent.

Serious Illness cover premiums do not qualify for tax relief. Income Protection premiums do.
 
Thanks LDF, this is very useful information, I will arrange a chat with my bank!
 
Why go back to your bank for advice? They have already sold you an unsuitable policy,why not talk to liam who is an Independent adviser (I have no connection with Liams company)


Www.powerinsurances.ie
 
OP. If this is a BoI Policy I would be very skeptical of it. Whilst you may be obliged to hold Life Assurance on your PPR, you do not have to use the company or any that they state that is providing the mortgage.
 
Hi guys, thanks for all that. Another question. Is serious illness cover as part of your mortgage protection policy an option or can a bank insist upon it.
 
Serious illness cover is optional, you just need basic mortgage protection in place for your mortgage. The bank cannot insist on you taking serious illness cover.
 
Another part of the rip off culture, where a case was tested in the Courts. A customer sued New Ireland this year as they refused to pay her in 2004 for this illness cover whence she had MS. The High Court found in the customer favour. Google it and you will find the case story.
 
Hi Plaid,
Quote Devil was listed in last weeks Sunday Indo as having the best value mortgage protection.
 
Mercman is quite right - watch out for the serious illness cover - the illnesses covered are very, very specific and you may end up with a serious illness which, while it prevents you from working and earning a liviing, is not on their list or is not sufficiently severe to qualify.
 
Read this and then decide: [broken link removed]. So if your Bank tell you they want XYZ then you just might have to jump through hoops to satisfy their requests
 
I think it is interesting that the doctor suspected MS but didn't say anything to the patient.

Some illnesses take so long to diagnose that there is no point in putting a patient through unnecessary worry about something that may or may not be. Most illnesses have to become not only diagnosed but must also match the description in the policy document that claiming is difficult. Most times the claim is paid when the person is severly disabled by the illness.

Why don't insurance companies help consumers to decide the value for themselves of such policies by (a) stating the age of the claimant (many do), (b) the amount paid (again many do) and (c) the length of time the person is alive after making a successful claim?
 
Saying that, when I was diagnosed with MS and the Doctor that I visited knew immediately from the syntoms. But when it came to Life Assurance the differences in premiums was vast, and the tests I had to go through were invasive to say the least.

Insurance companiers have teams of Actuarys that calculater the figures without knowing or looking at the patient.
 
A conversation with my local Doctor and friend is the basis for me believing a doctor won't risk telling a patient they suspect but are not 100% sure that they have MS.

From an insueres point of view yes you are correct they use actuarial calculations but these can only come into being when all facts are known. So a person who is currently undergoing medical tests would be automatically postponed until all results and investigations have been completed.

As a side Mercman is your investment case coming up soon?
 
At the time I was diagnosed, I was living in the UK but my wife who was a nurse at the time had a fair idea, but thge doctor (consultant) knew straight away. (I went blind overnight) TG, I'm OK now. At that tinme the cost of Life Assurance was double the price in the UK than in Ireland.

On the side, the Court Case was last Monday and the Judge found in favour of myself and the Ombudsman.
 
"Court case"

That's brilliant news Mercman. Just shows us all that justice does indeed exist these days. Well done and congratulations.
 
Thanks for that. Although I think as they so Out of Order in their antics over the past three years, they might take the case to the Supreme Court.
 
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