Life Mortgage protection only?

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billy-bob

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Having recently taken my budgetting by the scruff of the neck, I'm now seeing where I can cut bills, etc. One big one that I've never really given thought to is my mortgage protection policy. This is costing me (single, paye, full time) in excess of 50 quid per month. From looking around here, that seems atrociously high. I rang Zurich to find out if it was possible that this included mortgage repayment or life assurance or anything extra but all the phone monkey said was that in the event of my death, the mortgage would be paid off.

That sounds like pure mortgage protection only to me, and it would seem prudent to check out the likes of 123 or monitum for a cheaper alternative.

I've had this policy since I got my mortgage and went with Zurich as they already have my car insurance and I got a discount in the first year (long gone). This policy seems to be perpetual, ie I don't get any sort of documentation now and then to renew it, so I assume I can just cancel it anytime without penalty (actually, that's probably more a question for Zurich, but if anyone else has gone through this recently?)
 
Your policy is more than likely assigned to your lender so I would not cancel it until you have put a replacement policy in place. Once you do this, there should not be a penalty for cancelling.

Zurich would be one of the most competitive insurers for mortgage protection.

€50 per month could be good value but this would depend on size and term of mortgage, smoker/non smoker, age and health issues. It always pays to shop around though you might find cover even more expensive as you have aged since the policy was taken out. Also check is there serious illness cover attached to it.
 
Tks Norfbank, yeah, I'll get cover elsewhere before cancelling. When I took out the policy, my details were:

Mortgage: 210k over 30 years
Male, non smoker, 32

Since my details now are

Mortgage: c190k over 25 years
Male, non smoker, 37

123.ie has quoted me at around e17 pm for mortgage protection only. The fact that Zurich are 3 times that, but you say they're "competitive" worries me that I'm missing something?

ETA: Ok, found the policy document and it says 'Eagle Star (as was) Guaranteed Mortgage Protection Plan', so it appears to be just a protection plan and the 17 odd quid being quoted by 123.ie is comparable?
 
The price you have been quoted assumes acceptance at ordinary rates. We dont know enough about your original proposal to tell if this is how you were accepted or if some special loading for health/occupational grounds was applied.

Basically you want to cut costs though, the mortgage protection policy is suitable for this purpose once there is no "interest only" aspect to the loan, in which case your lender may require a level term policy. I assume this is not the case since your mortgage amount has decreased.


www.CheaperLifeAssurance.ie
 
Tks StevieC. Yeah, I thought there might have been some medical aspect to my original policy, but I KNOW I didn't have a physical or anything last time. I've applied for a pack from labrokers.ie (Friends First) and see why they end up trying to charge me and then give Zurich a chance to explain why they're more expensive, assuming they are, before I cancel.
 
17 a month sounds very competitive. 50 a month is very uncompetitive!

Our mortgage protection is for well over 300k (married couple, both under 40, non smokers) and is 33 a month. Rang round a few brokers recently and got quotes from 29 - 40. Can't see how 50 a month for a mortgage less than 200k is justified
 
it's important to compare like with like for mortgage protection. Rundown % is important - the lower the % the cheaper the insurance and also the frequency of rundown can be monthly or yearly (monthly is cheaper) and means your insurance cover reduces monthly which is in sync with your mortgage payments. I work in the industry and shopping around is crucial.
 
should have said, there are no penalties on pure term assurance policies for mortgage protection. However, in the past brokers were selling savings policies with an element of mortgage protection and these might be subject to surrender penalties. It is also worth noting that if you've given up smoking 3 years ago you might be entitled to a non-smoker rate so that's another way of reducing premiums
 
The biggest con with mortgage protection is that your lender sets up one direct debit to cover a multitude of policies. To the consumer this means you don't really know how much you are paying because many lenders use the convenience of one direct debit to disguise the precise breakdown of how much you are paying for various protection policies which in turn means you are less likely to shop around for better value policies and stay where you are put. To cover a repayment mortgage on your principal private residence you only need two policies. 1. Life Assurance (commonly called mortgage protection to cover a repayment loan) and basic house insurance. There are thousands of you out there who have been sold more insurance than you actually need so next working day phone your lender and find out exactly what you are paying for then see if you can save money by switching to a cheaper policy that you source elsewhere. If someone has conned you into buying a more expensive policy then don't reward them with your repeat business. Teach them a lesson and take your business elsewhere.

So there you go, anyone who benefits from this posting please consider paying €10 to AAM to enable them continue this good work or to a worthy charity such as the Samaritans.
 
Funkf00t said:
If you were single, why would you need to have the mortgage covered in the event of your death? Just to muddy the waters, if you are planning on having a family any time soon, think twice.

Funkf00t
http://www.inherits.info
Click to expand...


Funkfoot, I notice your website is not Irish that is probably why you might not be aware that under Irish legislation, people are obliged by law under the Consumer Credit Act 1995 to have a mortgage protection policy on their principal residence (exceptions can be made for those refused cover or those over age 50).
 
Sumatra said:
The biggest con with mortgage protection is that your lender sets up one direct debit to cover a multitude of policies. To the consumer this means you don't really know how much you are paying because many lenders use the convenience of one direct debit to disguise the precise breakdown of how much you are paying for various protection policies which in turn means you are less likely to shop around for better value policies and stay where you are put. To cover a repayment mortgage on your principal private residence you only need two policies. 1. Life Assurance (commonly called mortgage protection to cover a repayment loan) and basic house insurance. There are thousands of you out there who have been sold more insurance than you actually need so next working day phone your lender and find out exactly what you are paying for then see if you can save money by switching to a cheaper policy that you source elsewhere. If someone has conned you into buying a more expensive policy then don't reward them with your repeat business. Teach them a lesson and take your business elsewhere.

So there you go, anyone who benefits from this posting please consider paying €10 to AAM to enable them continue this good work or to a worthy charity such as the Samaritans.
Click to expand...

Do you work in this business? As most people who do, say you need mortgage protection ,life insurance, serious illness cover and thats before your home insurance etc
 
Mortgage Protection

Myself and my wife have a mortgage with NIB €120,000 over 15 years.
I took out mortgage protection on myself and did not include my wife as she had ailments and it was costing €165 per month against €35 per month for myself as I am working and she is not so I took on the risk.
I received a call from NIB saying that my wife must be included in the mortgage protection as we have joint mortgage.
I am not sure if this is correct or can I take out mortgage protection on myself only?
 
If its your principal residence and the loan is in both your names then the lender can insist on both lives being covered. However, I have come across cases where if someone states that they cannot afford a 2 person policy due to premium loadings that the lender can allow discretion and allow a 1 person policy once its on the primary earner. The logic being that having a policy on one person is better than none especially if they are the one paying the bills.



www.CheaperLifeAssurance.ie
 
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