Insurance and Mortgage

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roker

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My son after lots of searching around has found a mortgage provider.
Problem : because of a medical issue (back) which was not there when they applied, after 6 months wait for the solicitors to do their thing, the insurance sent another form to fill in and will not cover them because of the new medical issue, and the provider says they cannot use another insurance company.
I thought that you could now shop around for other mortgage protection insurance?
 
The minimum requirement for a mortgage is decreasing term life insurance (a.k.a. Mortgage Protection) which only pays out in the event of death. It would be rare that a back issue alone would cause a big problem with a life insurance application. Put bluntly back problems rarely affect your life expectancy. Two possibilities come to mind ... (1) Is he applying for Mortgage Protection with optional benefits like illness cover? If so, he could drop the optional covers for the time being and stick with the basic decreasing life insurance. It might change the provider's mind. (2) Are there ongoing medical tests awaited? As a general rule, insurers will hold off making a decision until they have results back from any pending medical tests.

If this mortgage is for him to buy a home for his own occupation (as distinct from an investment) then he's free to source his Mortgage Protection from any life insurance company and/or broker.
 
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These rules apparently don't seem to apply to a council loan, they're insisting on their insurance company
 
roker said:
These rules apparently don't seem to apply to a council loan, they're insisting on their insurance company
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Ah - I didn't realise you were talking about a council loan. I've seen threads here on Askaboutmoney and it seems the councils can and do insist upon their own Mortgage Protection insurance provider. I'd have a query in my head about how they can do this when other mortgage providers must allow insurance from any provider under the Consumer Credit Act, but I don't know much about council loans so I don't know how far he'd get challenging them on it.
 
As a warning to others, he went through the whole process for 6 month to almost handing over the keys.
 
Dave Vanian said:
Ah - I didn't realise you were talking about a council loan. I've seen threads here on Askaboutmoney and it seems the councils can and do insist upon their own Mortgage Protection insurance provider. I'd have a query in my head about how they can do this when other mortgage providers must allow insurance from any provider under the Consumer Credit Act, but I don't know much about council loans so I don't know how far he'd get challenging them on it.
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A lot of others would tell a lie, but he wants to be up front
 
This sounds terrible. To my mind, the Council is a public body which is indirectly discriminating against him by reason of a disability - they should make an accommodation to allow him to use a different insurer. But good luck trying to get anywhere legally with the Irish legislative framework.
 
time to plan said:
To my mind, the Council is a public body which is indirectly discriminating against him by reason of a disability
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Given that we only have one single word in this thread to describe the medical issue - "back" - it's perhaps a bit premature to be looking into making a case for discrimination for disability.

A life insurance company has no obligation to take someone on. Otherwise you'd get people looking to start life insurance policies towards the end of their lives. Pay a year or two in premiums and bingo - family gets a few hundred thousand when I die. Unworkable.

That said, I believe that the councils do have a case to answer. The legislation making it illegal for a bank to force a customer to take out insurance with their chosen company is there for consumer protection reasons. Do councils not have a responsibility to protect consumers? The situation is made worse by stories here on Askaboutmoney about how the council's own life insurance product can be significantly dearer than the comparable open market product. On the open market, policies pay the seller commission. I wonder has anyone asked a council if they are receiving commission from their chosen life insurance provider? Or why theirs costs more than the open market equivalent?
 
I agree with Dave Vanian's last post even though I will not have to go through that process. If there is ever anything to be done about this surely people affected by the extortionate charges imposed on them indirectly by the Councils should name the Insurance company used by the Co. Co's here. It might be a start to see where the Rip Off might be going.
 
Dave Vanian said:
Given that we only have one single word in this thread to describe the medical issue - "back" - it's perhaps a bit premature to be looking into making a case for discrimination for disability.
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Not at all. You need to understand the social model of disability. I have a visual impairment. I would be registered blind if my vision could not be corrected with spectacles. But I can see fine with spectacles, so I have an impairment, not a disability. If my county council said I wasn't allowed to wear spectacles on their premises, that act would have the effect of turning the impairment into a disability.

How does this apply to the medical issue (back)? The council is unwilling to make an accommodation for a medical issue to allow the son to get insurance. Under the social model of disability, this turns a medical issue into a disability.

But as I said, I doubt the Irish legislative framework would support this.
 
A mortgage lender cannot legally withdraw a mortgage offer based upon being declined for mortgage protection through?
 
ATC110 said:
A mortgage lender cannot legally withdraw a mortgage offer based upon being declined for mortgage protection through?
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They don't have to withdraw it as such but if customer can't comply with the conditions of draw down such as mortgage protection then it can't be drawn down, some banks offer waivers in this sort of situation but are not obliged to do so, don't know what the story with council and waivers is.
 
ATC110 said:
A mortgage lender cannot legally withdraw a mortgage offer based upon being declined for mortgage protection through?
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This has been clarified many times here on Askaboutmoney. A lender is under no obligation to give you a loan if you cannot get life insurance. If you are refused life insurance, they have have discretion to waive the requirement if they choose to use that discretion. (Cases I've seen where the lender uses that discretion include a situation where the person who cannot get life insurance is a non-earning spouse.)

Anyway, a mortgage lender is not allowed to insist that you take the life cover with their preferred insurance company. But councils do insist on this. So perhaps a council is not considered to be a mortgage lender for the purposes of this legislation.
 
Maybe it's moot at this stage if the purchase has already fallen through, but is there perhaps some appeals process that might yield flexibility on the part of the council (to allow for insurance elsewhere) or the tied insurance company (to cover with an exclusion on the back issue)? Or, failing that, lobbying the local councillors?
 
Just came across this old thread which may be relevant in the context of this thread?

Very expensive AH MPP (Mortgage Protection Policy)? Alternatives costs 5 times less!

I bought an affordable home 5 years ago. I recently found out that I am paying over €60 per month for mortgage protection to the council. Having shopped around, I can get a similiar policy for €10 euro per month. The council have informed me that I must continue to pay into the current policy...
www.askaboutmoney.com
 
I bought a house through that scheme. I got the council's MPI as no medical issues but I think I did hear of cases where people didn't qualify for the MPI and I thought were allowed approach other lenders. There's a good thread on Boards.ie where you could ask the question.
www.boards.ie

Rebuilding Ireland home loan - Page 90

So sorry to hear this. There is 5 other main insurance companies I believe. And pulse in the U.K. are meant to be good too.
www.boards.ie www.boards.ie
 
Monbretia said:
They don't have to withdraw it as such but if customer can't comply with the conditions of draw down such as mortgage protection then it can't be drawn down, some banks offer waivers in this sort of situation but are not obliged to do so, don't know what the story with council and waivers is.
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The point is, they will not let you shop around, insurance companies have different rules
 
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