Mortgage Insurance

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Maximus152

Registered User
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Hi all,
I have a mortgage. I have Mortgage insurance. I pay for critical illness and two other ones I am not even sure what they are (I basically just agreed 7 years ago to pay when getting mortgage). My question is this. I work with some people and they have only critical illness, which to me makes sense. For one it is next to impossible to get insurance company to pay out if you loose your job. So I pay out in total approx 170 per month. I am just wondering am I being had here :confused:

Maximus
 
Hi Maximus152

First of all I would have a look at the policy that you have, you should have been sent a copy of this. If you don't have a copy of it, I would contact whomever you took the mortgage insurance policy out with and get a breakdown of the policy.

In relation to the 170 per month, you would need to find out what type of cover you have. The premium for insurance differs for anyone.

Hope this is of some help

Hizzy
 
Hizzy, yes well thanks for advice. Do you know if you can cancel any one you believe you do not need i.e you think is a non requirement obviously not critical illness.

Rgds
Maximus
 
You can cancel whatever policy you like but it is advisable not to cancel one until you have a similar policy in place.

The mortgage protection or life cover could be assigned to your lender though so if you cancel this they will request another one to be put in its place.

As Hizzy said it is difficult to say if €170 is value without knowing exactly what is in place and your health situation etc.
 
Maximus152 said:
Hi all,
I have a mortgage. I have Mortgage insurance. I pay for critical illness and two other ones I am not even sure what they are (I basically just agreed 7 years ago to pay when getting mortgage). My question is this. I work with some people and they have only critical illness, which to me makes sense. For one it is next to impossible to get insurance company to pay out if you loose your job. So I pay out in total approx 170 per month. I am just wondering am I being had here :confused:

Maximus
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Check what your cover is.

Sounds like you might have Life Cover with Critical Illness Cover and possibly some add-ons like Permanent Disability cover.

You'll find the Critical Illness cover to be the majority of your premium. You can cancel this and keep life cover only (Life cover is mandatory).

The reason critical illness is costs more, however, is that you are much more likely to get cancer, stroke, heart attack, etc than you are to die.

I've seen lazy journalists compare the cost of critical illness to the cost of life cover and declare that critical illness is bad value simply because it costs more, with no reference whatsoever to the fact that you could be 5 times more likely to make a critical illness claim than a death claim!!
 
Der Kaiser, I see what you mean. I assumed Critical illness was the one you needed to get mortgage approval, life cover is mandatory! Okay well at keast I can enquire but from what you are saying its wise to have CI and LC as a statistical fact.

Maximus
 
If you're paying out €170 per month on assorted insurances, you really should take a while to establish exactly what you're covered for and then decide (a) if you need/want all the various elements and (b) if you're getting the best deal on cover.

Depending on your occupation and health history, you could consider Income Protection as an alternative to critical illness cover. Income Protection pays you an income if you are unable to carry out your own job due to accident or any illness while critical illness only pays out on diagnosis of one of the listed illnesses. Income Protection premiums are also allowable for tax relief in full at your highest rate.
 
I have been looking at this very thing myself in the last few days.

You need life cover for a mortgage, on 290K I have been quoted a variety of options from €21/month to 45/month

It is best to keep mortgage protection/life cover and critical illness/life cover separate.

If you have an all in one package, which is what I assume you have, then if you are diagnosed with critical illness, the insurer will cover the mortgage and your family will not receive anything on depth.

If you have critical illness life cover separate from mortgage protection (life cover also), then you will get a pay out on diagnoses and the mortgage will be paid off on depth.

It is best to keep both separate and not a combine policy. Shop around and also check if you have any cover from work.

May appointments with a variety of insurers to get the best policy for you.
 
firewire said:
If you have an all in one package, which is what I assume you have, then if you are diagnosed with critical illness, the insurer will cover the mortgage and your family will not receive anything on depth.

If you have critical illness life cover separate from mortgage protection (life cover also), then you will get a pay out on diagnoses and the mortgage will be paid off on depth.
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Are you seriously suggesting that there are life policies available which do not pay out on death, if you have previously made a critical illness claim.
This does not make sense and I would be very surprised if a mortgage company would accept this as acceptable mandatory life cover for a mortgage holder.

If these policies do exist then this is very poor. Would any of the brokers out there like to comment ?
 
This is getting a bit confused. The purpose of mortgage protection is to pay off the mortgage in the event of death or illness if you choose that option.

If you want to be paid out on both illness and death you'll be charged more, but this is a separate type of contract.
 
DerKaiser said:
This is getting a bit confused. The purpose of mortgage protection is to pay off the mortgage in the event of death or illness if you choose that option.

If you want to be paid out on both illness and death you'll be charged more, but this is a separate type of contract.
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Not really. Mortgage providers do not require critical illness insurance. They do require life cover. They are different products.

I do not believe that any mortgage provider will accept a policy that pays out on either critical illness or death, as once the critical illness part kicks in, there is no longer a life insurance policy in place.
 
huskerdu said:
I do not believe that any mortgage provider will accept a policy that pays out on either critical illness or death, as once the critical illness part kicks in, there is no longer a life insurance policy in place.
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There are such products and they are acceptable to lenders. They are known as Accelerated Critical Illness cover policies, where the Critical Illness benefit is an accelerated payment of the death benefit.

A lender will only accept such a policy if they have an assignment over it and the critical illness benefit is at least sufficient to pay off the debt. So if the policyholder gets a critical illness, the policy pays out and the debt is repaid. If the life cover amount is the same amount as the accelerated critical illness benefit, the policy will end with no further death benefit. But the lender doesn't care because the debt has been repaid.
 
Thank you for explaining. That makes sense. I thought that critical illness policies only paid the monthly mortgage payment while sick, which would not be an adequate replacement for life cover.
 
do I need life cover if its on an investment property? I am paying for mortgage protection on the mortagage on 2 rented houses?Is this mandatory or can I drop it? I am 53 years old..as far as i know this mortgage protection policy is life cover only..
 
pytelium said:
do I need life cover if its on an investment property? I am paying for mortgage protection on the mortagage on 2 rented houses?Is this mandatory or can I drop it? I am 53 years old..as far as i know this mortgage protection policy is life cover only..
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Check with your lender but usually life cover is not mandatory on investment properties. It's advisable to have it though.
 
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