Mortgage Life Insurance

M

masterboy123

Registered User
Messages
374
Hi,

I have Mortgage Life Insurance with Irish Life.
I have made a few lump sum payments towards the mortgage and brought down the monthly mortgage repayments.
So I called Irish Life to get a reduced premium as the cover is lower now. Irish Life told me I would still need to pay the minimum premium of €13.13 per month.
When I asked the possibility of moving to another company I was told I have to stay with them for at least 5 years.
Does this sound right?

I am trying to find out the initial terms and conditions.

Thanks
 
Sounds odd to me.

When did you take the mortgage out?
When did you take the mortgage protection out?
Who is the mortgage with?
Was there some special deal with the two that tied you to sticking with this mortgage protection for 5 years?
Is there an "early breakage" penalty or are they telling you that you're locked in full stop?
You do need to find/get the policy booklet/terms and conditions to clarify some of this.
I can't see anything about a "fixed period" of 5 years here:


They do mention something about only being able to make policy changes in the first 5 years.
Perhaps the person that you were talking to simply gave you incorrect information?
 
masterboy123 said:
When I asked the possibility of moving to another company I was told I have to stay with them for at least 5 years.
Does this sound right?
Click to expand...
5 years is also the period of commission clawback with Irish Life. Did you take out the policy via a broker?
It doesn't force you to stay with Irish Life, but you might have agreed to compensate broker for commission clawed back if you terminated within 5 years.
 
ClubMan said:
Sounds odd to me.

When did you take the mortgage out?
When did you take the mortgage protection out?
Who is the mortgage with?
Was there some special deal with the two that tied you to sticking with this mortgage protection for 5 years?
Is there an "early breakage" penalty or are they telling you that you're locked in full stop?
You do need to find/get the policy booklet/terms and conditions to clarify some of this.
I can't see anything about a "fixed period" of 5 years here:


They do mention something about only being able to make policy changes in the first 5 years.
Perhaps the person that you were talking to simply gave you incorrect information?took Irish Life together with mortgage from PTSB. It was via a sales person from Irish Life who was based at PTSB office.
Click to expand...

ClubMan said:
Sounds odd to me.

When did you take the mortgage out?
When did you take the mortgage protection out?
Who is the mortgage with?
Was there some special deal with the two that tied you to sticking with this mortgage protection for 5 years?
Is there an "early breakage" penalty or are they telling you that you're locked in full stop?
You do need to find/get the policy booklet/terms and conditions to clarify some of this.
I can't see anything about a "fixed period" of 5 years here:


They do mention something about only being able to make policy changes in the first 5 years.
Perhaps the person that you were talking to simply gave you incorrect information?
Click to expand...
We took Irish Life together with our mortgage from PTSB. It was via a sales person from Irish Life who was based at PTSB office.

I don't recall any 5 years locked period and the plan is for 20 years.

What does it mean that we can make policy changes in the first 5 years?
What if I clear the whole mortgage before 5 years?
 
RedOnion said:
5 years is also the period of commission clawback with Irish Life. Did you take out the policy via a broker?
It doesn't force you to stay with Irish Life, but you might have agreed to compensate broker for commission clawed back if you terminated within 5 years.
Click to expand...
There was a sales agent from Irish Life who worked with PTSB at the time. But they didn't highlight 5 years period.
 
There is usually a minimum monthly premium so I presume what they are saying is you can reduce the cover but can't get lower than that premium anyway, I remember when I took out my last policy the minimum annual premium was less than the minimum monthly so I paid annually!

Realistically there isn't much stopping you taking out a new policy and just stop paying the old one, once you submit the new one to lender then the old one can be cancelled. However that is new underwriting obviously and if the amount is small you might be subject to minimum premium with new provider too.
 
RedOnion said:
5 years is also the period of commission clawback with Irish Life. Did you take out the policy via a broker?
It doesn't force you to stay with Irish Life, but you might have agreed to compensate broker for commission clawed back if you terminated within 5 years.
Click to expand...
That's the only thing that I can think of. The agent took the max commission and there is a 5 year clawback if the policy is moved. But that impacts on the agent and not on the policyholder. It would be odd for a life company to point that out to the policyholder.

Other companies have minimums of €10 a month. Not a huge saving for moving the plan given you have to go through underwriting again and fill out all the forms.


Steven
www.bluewaterfp.ie
 
If it's a reducing amount, they might still pay out the higher amount based on their initial calculations.

When we paid extra off our mortgage and then were looking for a top up, I asked my insurer for a statement to say that the policy was still in place. The bank wanted this.

Anyway, as an example, the amount remaining on the policy was €170k and the mortgage was €150k (out of an initial €200k). I asked what would happen if we needed to claim and they said the mortgage would be cleared and the remaining would go to the surviving spouse. It might be worth just keeping the current policy as an extra life insurance policy if the sums sound ok to you.
 
masterboy123 said:
Irish Life told me I would still need to pay the minimum premium of €13.13 per month.
When I asked the possibility of moving to another company I was told I have to stay with them for at least 5 years.
Click to expand...
As others have suggested, realistically how much do you stand to save compared to this premium if you do switch? Even if there's no clawback/penalty? What comparable quotes have you got? There doesn't seem to be much room for savings here?
 
ClubMan said:
As others have suggested, realistically how much do you stand to save compared to this premium if you do switch? Even if there's no clawback/penalty? What comparable quotes have you got? There doesn't seem to be much room for savings here?
Click to expand...
The clawback is against the advisor. there is no impact on the policyholder.

The most they can save is €3 a month. The other life company will work out the level of cover that can be provided for €10 a month (the 1% levy is added onto the €10) and that will be the amount of cover.
 
ClubMan said:
As others have suggested, realistically how much do you stand to save compared to this premium if you do switch? Even if there's no clawback/penalty? What comparable quotes have you got? There doesn't seem to be much room for savings here?
Click to expand...
I could save €36 a year atleast. I know it's a small amount for many of us but it is good enough for me.
I would eat a meal outside for instance
Thanks everyone.
Have a lovely weekend.
 
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