Mortgage protection overpaid x 2yrs

J

JohnnyBoy

Registered User
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Hello there,
I'd be grateful for any suggestions re the following.
My sister has just found out that she continued paying for Mortgage Protection 29 months after the mortgage had expired.Unfortunately,she's only just realised this.I know you'll say it's her fault & I know she should have checked her statements,but I would have thought that EBS(with whom she had the mortgage),ought to have informed New Ireland re the cessation of the mortgage.
My father rang the EBS,where a guy said that they forwarded on a letter to New Ireland.My Dad asked for a copy of this,but was told this wasn't possible.He then rang back the same day & was told that he misunderstood the original conversation & that no letter was sent on & that it was the responsibilty of my sister.
 
Mortgage Protection is a life insurance policy. Many people keep it on after repayment. You have had that protection/benefit for over 2 years. There is no way to reclaim it. If there had been a claim they would have had to pay up regardless of the fact that the mortgage had been paid off.
 
Excuse my ignorance,but I understood that there was a diference between the 2 that the Life Assurance was compulsory,while Mortgage Protection isn't.Again I'm not sure.
So there's no way it can be refunded?
 
Sorry, I assumed it was life insurance you were talking about , the other is income protection but again the same argument applies. Which was it?
 
Mortgage protection.AFAIK-income protection is nothing to do with a mortgage,ie it's simply if you are unable to work,you are paid an amount.
Personally I can't understand the function of mortgage protection,because she was also paying a life assurance policy as well
 
Mortgage protection simply repays the mortgage debt if the borrower dies during the mortgage term. The holder does not get the cash, the lender does. The amount paid on death decreases as the mortgage balance decreases.

There are convertible mortgage protection products which I believe can convert into normal standard life insurance.

So as she did not have a mortgage debt, then this product would seem to have been useless for that 29 month period.
 
If EBS arranged the policy as part of the mortgage then you may have some cause for complaint as the EBS should possibly have cancelled it.
check your terms and conditions

If your sister organised her own policy then she has paid the premium and had the benefit of life assurance for the past 29 months.
If anything unfortunate happened, New Ireland would still pay out.
In this instance EBS have nothing to do with it

Depending on the policy she has in place, your sister should think about keeping it if she has no other life cover. The same cover would work out more expensive if she took it out today.
 
The EBS arranged it-I'll get on to her to check T&C.
Can anybody tell me the difference though between mortgage protection(MP) & life assurance(LA) (they seem to be the same.My understanding was the LA policies can be continued after the lifetime of the mortgage,while a MP I understood ceased at the end of the mortgage.
 
JohnnyBoy said:
Personally I can't understand the function of mortgage protection,because she was also paying a life assurance policy as well
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JohnnyBoy said:
The EBS arranged it-I'll get on to her to check T&C.
Can anybody tell me the difference though between mortgage protection(MP) & life assurance(LA) (they seem to be the same.My understanding was the LA policies can be continued after the lifetime of the mortgage,while a MP I understood ceased at the end of the mortgage.
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"Mortgage protection" is a confusing term as it could refer to mortgage protection life assurance or mortgage loan repayment insurance. Different beasts - see here:

Mortgage Protection and Mortgage Repayment Protection Policies

Some people are talking about mortgage protection life assurance and some are talking about mortgage loan repayment insurance above. This is confusing the issue. Right now I assume that your sister has been making mortgage loan repayment insurance premium payments since the mortgage loan was cleared and that this query has nothing to do with mortgage protection life assurance at all.

Whether mortgage loan repayment insurance continues after the loan has been cleared (before term) depends on the terms & conditions of the policy.
 
Mortgage protection and Life assurance are really the same thing, cover in the event of death, when it is assigned to a mortgage it is referred to as mortgage protection, when not assigned it is referred to as Life Assurance . A policy that covers an individual for life is referred to as a whole of life policy. (ceases upon death)

The responsibility to cancel the policy lies with the policy holder not the lender, ( even if they organised it) The lender should however notify the Insurance company that the mortgage is repaid in full and that they no longer have an interest in the policy, but this letter would not automatically cancel a policy. Policy holder must cancel it themselves. If the policy your sister had was a decreasing mortgage protection policy with no other benefits ( i.e. Serious illness) then its highly likely that New Ireland will refund the premiums paid , they are not under obligation to, but it most cases will as a gesture of good will.
 
Molly is correct but I think that the issue of MPLA is not relevant to this query and the issue is with mortgage loan repayment insurance premiums continuing to be charged/paid after the loan was cleared (presumably early).
 
the issue is with mortgage loan repayment insurance premiums continuing to be charged/paid after the loan was cleared (presumably early).
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I presume the OP is referring to mortgage protection i.e. death benefit, not mortgage payment protection. maybe the OP should confirm which it is.

if it is in fact mortgage payment protection, then it normally would be built into the mortgage repayment and automatically cease along with the mortgage.
 
Yes - I agree that it's very confusing at this stage so the original poster needs to clarify precisely what the issue is.
 
Thanks for the feedback,I'll try to clarify.
This was a Mortgage Protection Policy.It was not a mortgage payment protection.She did not have a Life Assurance policy.She was told that this was compulsory.
 
from my understanding different providers provide different things. Mortgage protection and some life policies are taken out to cover the balance of the mortgage should you die (or become critically ill if you have that on your policy). Life assurance can be used in the same way but with a lump sum paid out and not decreasing cover as you would expect to find in a mortgage protection. Your sister probably could have used her life assurance as the mortgage protection if it pays out enough to pay off the mortgage and if accepted by the mortgage provider. I don't see how paying the MPP for the 29 months was of any benefit to her and i would push with the bank to get this money refunded.
 
JohnnyBoy said:
This was a Mortgage Protection Policy.It was not a mortgage payment protection.She did not have a Life Assurance policy
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This does not make sense. You presumably mean that it was a mortgage protection life assurance policy? This cover is mandatory for owner occupier borrowers (with some exceptions). If this is the case then this policy will run for the original term of the loan and if the loan is repaid early then it's up to the borrower to decide whether or not they want to retain it and to act accordingly. It's not the lender's responsibility. In fact cancelling the MPLA policy just because the loan has been cleared early would be out of order! If she does not want this policy any more and did not want it beyond the lifetime of the loan then as mentioned above she should contact the underwriter and see if she can get a refund of the premiums paid since the loan was cleared. The underwriter may or may not allow for this. Either way if she does not want the cover (and note that there are arguments for and against cancelling it depending on personal circumstances) then she should cancel it now.
 
Contact EBS and inform them that you want a refund for the period since the loan closed upto the last premium was paid on the policy.

The Mortgage Protection policy is still assigned to EBS, Im assuming they havent released the policy documents?

If you can provide proof of the premiums paid on the policy, ie bank statements showing the premiums debited from the account they have to refund as the should have removed their interest from the policy when it closed by sending the letter. If the policy is with New Ireland then EBS would not have arranged it (ex employee of EBS, also worked in the life section there!)
Your sisters suitation is all to familiar in there, but bottom lone is your sister did not need the policy as she had her own cover, so she should not have to pay for their mistake.

Ring them tomorrow and demand a refund.
 
Bobby1 said:
If you can provide proof of the premiums paid on the policy, ie bank statements showing the premiums debited from the account they have to refund
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Are you sure that this is necessarily the case? Even when the mortgage is vacated and the lender has no further interest in it and the MPLA policy is no longer assigned to them it's surely up to the borrower to decide what to do with it (i.e. cancel or retain)?
Your sisters suitation is all to familiar in there, but bottom lone is your sister did not need the policy as she had her own cover, so she should not have to pay for their mistake.
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I don't get this - where is it stated that she had her own life assurance cover (bear in mind the earlier confusion about and misuse of terminology) and why is this necessarily the EBS's mistake.
 
Contact EBS and inform them that you want a refund for the period since the loan closed up to the last premium was paid on the policy
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.

EBS did not receive payments for the mortgage protection policy, premiums were paid to New Ireland. EBS are not responsible for refunding any over payments. Because a mortgage lender no longer holds an interest in a policy does not automatically mean the policy holder no longer has a need for said policy, it may have added benefits which the policy holder may want to retain after the mortgage was repaid.

There's still a confusion as to what cover the OP sister had, I'm assuming it was decreasing mortgage protection, and if this is the case then she should seek a refund of payments from New Ireland, they will probably refund her as a gesture of goodwill.

It is always the responsibility of the policy holder to cancel any protection policies they hold, not the responsibility of the lender it is / has been assigned to.
 
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