Mortgage life insurance cost reduction with mortgage reduction

Your broker is correct. The premium is set at a fixed amount at the start based on various criteria (age, smoker status, mortgage term and amount etc.) and does not decrease as the outstanding capital reduces. However you could shop around for cover for the remaining amount and term and if you get a lower premium put alternative cover in place and cancel the old policy (with the knowledge and permission of your lender).
 
Contact Eagle Star,customer services department directly and ask to reduce the death benefit on the policy to the amount of your mortgage and the premium can be reduced on a pro rate basis whether it is decreasing or level.The only problem that you may have is the fact the policy is probably assigned to a lender and it may require their permission. If the saving is small you may just decide to keep the cover intact.
 
harvey said:
Contact Eagle Star,customer services department directly and ask to reduce the death benefit on the policy to the amount of your mortgage and the premium can be reduced on a pro rate basis whether it is decreasing or level.The only problem that you may have is the fact the policy is probably assigned to a lender and it may require their permission. If the saving is small you may just decide to keep the cover intact.
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That is not possible. Term assurances are not flexible.

As Clubman said earlier a new policy must be set up.

You don't need a lenders consent to do this either. Simply effect the reduced cover and hand it over. The old policy will then be free to be cancelled.
 
RS2K said:
That is not possible. Term assurances are not flexible.

As Clubman said earlier a new policy must be set up.

You don't need a lenders consent to do this either. Simply effect the reduced cover and hand it over. The old policy will then be free to be cancelled.
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Not so ! Perhaps not every company will facilitate but it can be done by way of replacement by some.
 
harvey said:
Not so ! Perhaps not every company will facilitate but it can be done by way of replacement by some.
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I do not agree.

Term assurance sums assured cannot be reduced.

A new policy is always required.
 
That's my understanding too. If some underwriters facilitate a "replacement" then it will most likely be by replacing the old policy with a new one and not varying the terms/premiums and cover of the old one.
 
RS2K said:
I do not agree.

Term assurance sums assured cannot be reduced.

A new policy is always required.
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I have confirmed with my direct source that there is certainly one company who will facilitate.
 
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