Life Life Assurance Query

D

dilbert27

Guest
Got a mortgage 4 years ago and my dad went on it to secure it for me. All repayments are made by me.

The life assurance had to cover us both as we were both on the mortgage.

Dad in his 60's and smoker at the time.
Me (male), mid 20's non smoker.

Cover is 117 euro a month. I didn't think anything of this until a bank manager told me 2 months ago that it seemed really high for me.

I checked a recent survey and the company I'm with offer life assurance for a 30 year old non-smoker for about 26 euro a month which means I'm paying 90 euro a month to have my dad's name on the mortgage!

So the query is, does my dad have to be on the life assurance policy?
 
If he is a joint borrower, I'd say so.

If he is just a guarantor, I don't know.

FYI: I pay 100 pa or under 10 pm for 20 years MPP, non-smoker, got mortgage aged 30 approx.
 
If you can show your lender that you now have the earnings to qualify for the loan on your own, they may be willing to (a) remove your father from the mortgage, if he was only a guarantor or (b) release the requirement for him to be covered by life assurance. Worth asking.

I note you said that your father was a smoker at the time. If he's been off the smokes for over twelve months and is in good health, you may be able to get a cheaper policy now. Post your ages now, the amount outstanding on the mortgage and the expiry date of the mortgage. (Was it a condition that your father had life assurance for the full amount and term of the mortgage or just some of it?)

Liam D. Ferguson
 
Hi
You said your dad is on the mortgage, so yes, he needs life cover. Wow €90 a month is so much of an unnecessary bill to pay!
Make sure it's a reducing term policy without specified illness cover - they're the cheapest. Some life companies won't let you change smoker status.. Irish Life won't change the smoker status for over 40s or for term policies - you would need to cancel your existing policy and take out a new one which may be more expensive.
 
tenchi-fan said:
Hi
You said your dad is on the mortgage, so yes, he needs life cover. Wow €90 a month is so much of an unnecessary bill to pay!
Make sure it's a reducing term policy without specified illness cover - they're the cheapest. Some life companies won't let you change smoker status.. Irish Life won't change the smoker status for over 40s or for term policies - you would need to cancel your existing policy and take out a new one which may be more expensive.
Click to expand...

Even if they take out a new policy, its very unlikely it will be more expensive. Remember the term of the policy will have decreased, the sum assured will have decreased. Smoker status roughly doubles the price of life assurance. I would be extremely doubtful that re-proposing on a non-smoker basis would increase the premium unless there have been changes to health that could affect the underwriting.




www.CheaperLifeAssurance.ie
 
Update

Hi,

thanks for the replies. Okay I've actually looked at what I signed up for at the weekend and it's not what I've been thinking all along!

My dad isn't on the policy at all. It's just me. The policy covers mortgage protection with Life Cover and Illness Cover of 257,600 euro over 30 years costing 117 euro a month.

So I guess it's the 30 year term that has it so high. I really don't have a clue what this entails.
I remember at the time in case anything happened to me I didn't want my parents caught in having to repay my mortgage just because I had my dad's name on it.

Is what I currently have good or should I review my policy?

Techni-Fan said to make sure it's a reducing term policy without specified illness cover. Should I change my current policy to this?
 
Its the serious illness part of the policy that making it so expensive.

30 year term, 257,600 life cover, male, non smoker, age 25, assuming acceptance at ordinary rates the premium would be approx 153 per annum on a decreasing basis. On a level basis it would be approx 211 per annum.

If you can live without the serious illness cover, then you can save a nice amount.





www.CheaperLifeAssurance.ie
 
Thanks Stevie.

I can see now how that's having an impact. Even if I reduce it to 100,000 it would save about 50 euro a month.

Is it possible to amend a policy to reduce the serious illness cover or do I have to take out a new policy and close the existing one?
 
Typically the policies are inflexible, you'll probably have to take out a new one. Its just filling in a form though and when you have the policy telling your mortgage provider that its your new policy and signing a new deed of assignment. Not much to it.
 
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