We have just mortgage protection on current house. We have sold current house and are buying a new house. We will need mortgage Protection for the new mortgage €250k. Do we need serious illness cover / Life Insurance cover? Both 40, healthy non smokers. Me death in service 4x salary. Husband Defence Forces would have death pension & lum sum if pass away in service.
Mortgage Protection / Serious Illness / Life Insurance
- Thread starter RebelOg
- Start date
Mortgage protection is all you need to satisfy legal requirements.
Do you think you might be trading up again?
If so you should consider getting Life Insurance Cover now to cover you until age of retirement.
If you come to trade up again at age 50 you may have have accumulated health issues which could make underwriting difficult.
This is a more expensive form of cover as it does not reduce the covered amount over time as per mortgage protection.
Serious illness cover policies have a reputation of being difficult to claim against.
Income protection is usually preferred than serious illness cover e.g. in a scenario where the main earner was unable to work (accident or illness) would you still be able to cover mortgage? If you have sufficient income from one earner and state disability payments then it may not be necessary.
Do you think you might be trading up again?
If so you should consider getting Life Insurance Cover now to cover you until age of retirement.
If you come to trade up again at age 50 you may have have accumulated health issues which could make underwriting difficult.
This is a more expensive form of cover as it does not reduce the covered amount over time as per mortgage protection.
Serious illness cover policies have a reputation of being difficult to claim against.
Income protection is usually preferred than serious illness cover e.g. in a scenario where the main earner was unable to work (accident or illness) would you still be able to cover mortgage? If you have sufficient income from one earner and state disability payments then it may not be necessary.
NoRegretsCoyote
Registered User
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- 5,766
Excuse my ignorance, but don't mortgage providers insist on it?
According to this it is:
The lender is legally required under Section 126 of the Consumer Credit Act 1995 to make sure that you have mortgage protection insurance before giving you a mortgage,
You do not have to take out mortgage protection insurance if:
- You are aged over 50 or
- The mortgage is not on your principal private residence (your home) or
- You cannot get the insurance, or can only get it at a much higher premium than normal or
- You already have enough life insurance to pay off the home loan if you die
Insurance protection on mortgages
Brief description of 2 different types of insurance that you can take out in respect of a mortgage.
Have you any basis for that assertion?
Steven Barrett
Registered User
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- 5,125
To be honest, trying to get out of mortgage protection isn't a wise course of action. Mortgage protection is not expensive but having to pay for a mortgage yourself is, especially when you can insure that risk relatively cheaply.
If you do not satisfy one of those requirements, a bank will not give you a mortgage without covering the loan. Work related death in service benefit is not accepted as it is written under trust and cannot be assigned.
Steven
www.bluewaterfp.ie
Consumer Credit Act, 1995, Section 126
The electronic Irish Statute Book (eISB) comprises the Acts of the Oireachtas (Parliament), Statutory Instruments, Legislation Directory, Constitution and a limited number of pre-1922 Acts.
www.irishstatutebook.ie
@Thirsty
.
That provision does not prevent a lender from insisting that an applicant has mortgage protection insurance in place as a condition of a home loan.
I would respectfully suggest that you have no basis for your assertion to that effect.
How am I incorrect?And I would equally respectfully suggest that you are incorrect and I have personal knowledge to support.
The Consumer Credit Act does not preclude a lender from insisting that an applicant has mortgage protection insurance in place as a condition of a home loan.
Section 126 of the CCA provides that a mortgage lender is required, with certain exceptions, to arrange mortgage protection insurance. It says absolutely nothing about the conditions that a lender can lawfully attach to any loan offer.
So, I’m afraid your “personal knowledge” on this topic is flawed and your posts in this regard are misleading.
You are incorrect on this point.
I suspect you know full well that you have been caught out talking nonsense but you are not prepared to admit it publicly.
I’ll leave it to others to judge for themselves what to make of your “personal knowledge”...
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'Fraid not!
I have personal knowlege of more than one case where this requirement was challenged under the exceptions given.
Was it a walk in the park re lenders? Probably not. But it's useful to know this can be challenged if you need to.
Are you better off with some form of life cover? I would say yes, most definitely; if you can get it.
Lots of folks have medical conditions that either preclude life cover or push premiums to a very high figure.
Don't let that stop you from looking to buy your home.
I have personal knowlege of more than one case where this requirement was challenged under the exceptions given.
Was it a walk in the park re lenders? Probably not. But it's useful to know this can be challenged if you need to.
Are you better off with some form of life cover? I would say yes, most definitely; if you can get it.
Lots of folks have medical conditions that either preclude life cover or push premiums to a very high figure.
Don't let that stop you from looking to buy your home.
@Thirsty
Now you are just embarrassing yourself.
Of course an applicant can request a lender to waive their requirement to have appropriate life assurance in place. Maybe the lender will accede to that request, maybe they won’t - it’s entirely at the discretion of the lender.
You originally said that in certain circumstances a lender cannot insist on mortgage protection being in place as a condition of a home loan.
That is demonstrably untrue.
Now you are just embarrassing yourself.
Of course an applicant can request a lender to waive their requirement to have appropriate life assurance in place. Maybe the lender will accede to that request, maybe they won’t - it’s entirely at the discretion of the lender.
You originally said that in certain circumstances a lender cannot insist on mortgage protection being in place as a condition of a home loan.
That is demonstrably untrue.
Dave Vanian
Registered User
- Messages
- 1,253
@Sarenco is correct above. It might be helpful if I laid things out in black and white.
The following applies only to people borrowing to buy a home for their own occupation, a.k.a. owner-occupier homeloans.
The following applies only to people borrowing to buy a home for their own occupation, a.k.a. owner-occupier homeloans.
- If the above exclusion conditions aren't met, the lender is legally obliged to insist that you have Mortgage Protection. In other words, if you're under 50 and can get cover with no loadings, a lender has no discretion to let you off without it.
- If the exclusion conditions are met, the lender has discretion as to whether or not they want to lend to you without life cover. They will look at the circumstances of your application and decide.
- If a lender decides not to lend to you, you are, of course free to challenge that decision. They might even change their minds, as seems to be the case in examples that @Thirsty has seen. But that doesn't change the fact that a lender has no legal obligation to lend you money without Mortgage Protection life insurance in place.