New Mortgage Life Insurance / Mortgage Protection

[Moneysaver]

Just received mortgage approval for a new mortgage and found a house that we both want to purchase. The mortgage will be in both names - so I assume we need to have a joint life insurance policy? We both have existing life insurance policies albeit not for the same term of the mortgage.

What happens if one of the parties has been diagnosed with an illness since they last took out their policy? Could anyone recommend if it would be better to try to increase the cover on existing policies or should we apply for an entirely new policy? Any advice would be extremely helpful.

 

[Monbretia]

As regards the illness it's the same thing, if you go to increase existing cover it will be underwritten again as a new policy so the illness will come into play.

Might be a case that you will need to hold onto the old policy depending obviously on the illness and it's effect on cost of life cover. Apply for a new one but keep the old one until you are sure you can get what you want at an affordable price, if there are difficulties there then you can look into getting a waiver from the bank while continuing to keep the old policy if more practical.

 

[Moneysaver]

Thanks Monbretia. Very helpful. We are planning on keeping our existing policies in place. Pity they didn't cover the new mortgage (which is unfortunately for a higher amount).

 

[Jimbobp]

I would check with your existing life insurance provider and see if they have a mechanism for changing your cover without medical underwriting (some contracts have this option for 'life events' such as purchasing a house). If not you will need to take out a new policy. Try do this sooner rather than later as there is no guarantee you will get the cover you need.