Life Life cover - keep it separate & unnassigned or not?

A

Apollo

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hi all,

A mate of mine is getting a mortgage and his broker is urging him to lump a €100k of personal protection on top of his mortgage protection.

The mortgage is €200k so the broker is proposing to set up a €300k policy on a level basis, I believe was the term used, so that if anything happens to him or his wife there will be some money left over to see either survivor or their child, 8 yrs old, through hard times.

My question is should he not take out a separate policy for his personal protection and only assign to the bank what they require? I.e the €200k? Isn't it easier this way in the event of a claim whereby the personal protection is paid out quicker without the presense of a third party, i.e. the bank?

Thanks in advance.
 
hi there, when i took out my mortgage i was required to get a serious illness and mortgage protection plan by the bank before they'd give me the mortgage loan. i got one which costs 12.50 per month.

years on and husband, kids etc., in the picture we decided to take out a separate life assurance policy (approx 102.00 per month). see my previous posts in relation to this. so in the event of one of us dying the mortagage will be paid off from the policy tied to my mortgage. then my second policy the life assurance policy will pay out 300k. it's not a whole lot but it's all we can afford for now and hey it's better than nothing!! should our circumstances change in a few years then we can review our sum assured and either cancel the policy and take out a new one or whatever needs be. hope this helps.
 
Apollo said:
My question is should he not take out a separate policy for his personal protection and only assign to the bank what they require? I.e the €200k? Isn't it easier this way in the event of a claim whereby the personal protection is paid out quicker without the presense of a third party, i.e. the bank?
Click to expand...

You are correct Apollo, your friend your take out a basic mortgage protection policy and assign it to the bank.

A separate life insurance policy should be taken out to leave money to take care of his/her family.
 
Hi Apollo
You are dead right, your friend should only assign the bare minimum to keep his lender happy. Decreasing mortgage protection is quite cheap and good enough for any repayment mortgage.
He should then take out a personal policy which he would own personally, this should be a more thorough policy.
D
 
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