Mortgage protection cost

S

sinky

Registered User
Messages
18
Hi All,

I've recently taken out a mortgage and I had trouble getting life cover. i've had some health problems and the general consensus is that I was too honest in the life policy questionnaire. I have no dependents and no desire to acquire any, so actual cover on death doesn't worry me. My quote was loaded from €12 to €80 a month! Do I have any option to reduce this? If I try to change company and don't disclose any health issues, will they cross check with my current company? If I cancel it outright, will my bank be notified I have no mortgage protection? I had no time to shop around at the time because the vendor nearly pulled out of the house because of the delay as it took about two months to get the policy.

Cheers,
S.
 
You can never be too honest in a life insurance application, non disclosure means no payout! You can shop around when you get time but you will have to have a policy in force until the mortgage is drawn down. If it is assigned to the borrower then yes they will be notified if you cancel it.
 
I don't really care about the payout though because if they are paying out it means I'm dead!! I have no income protection or critical illness cover just mortgage protection. If I disclose all information to another company I'm sure they will cover me for a similar price. My question is will they check loadings etc with my current provider?
 
There used to be a central register for things like this, not sure if it still exits but if you are going to fib on a new policy you may as well not bother with any policy as you would be paying money for nothing if it is invalid, if you cancel the bank will be notified but probably not a lot they will do about it, a few letters telling you it's a condition of your mortgage etc but I have never seen anything happen beyond the letter. Not all companies treat all conditions the same way so it is possible another company would give a different quote, an insurance broker should be able to guide you as to the best company to try for whatever ails you.

Mind you I was always of the opinion single people with no dependants should have critical illness or income protection rather than life cover as living while ill and not earning was a bigger risk to them. But of course the lender is not interested in the risk to you, only to them!
 
To be honest no policy is what I want but it was a condition of drawing down the mortgage. LTV is 70% and repayments are reasonable. Worst case scenario I'd get a housemate. I would have been interested in income protection but I found the life cover application so OTT & intrusive I'll put that on the back burner. What else could the bank do if I cancelled the policy? Can they insist on withdrawing mortgage legally speaking?
 
I've never seen it happen. They will contact you definitely and see it as an opportunity to sell you a policy but I doubt anything more will happen if you don't have one. All insurance forms are very detailed, basically what you had for breakfast, don't take it personally, they have to assess the risk properly and can't without all the info.
 
sinky said:
Hi All,

I've recently taken out a mortgage and I had trouble getting life cover. i've had some health problems and the general consensus is that I was too honest in the life policy questionnaire. I have no dependents and no desire to acquire any, so actual cover on death doesn't worry me. My quote was loaded from €12 to €80 a month! Do I have any option to reduce this? If I try to change company and don't disclose any health issues, will they cross check with my current company? If I cancel it outright, will my bank be notified I have no mortgage protection? I had no time to shop around at the time because the vendor nearly pulled out of the house because of the delay as it took about two months to get the policy.

Cheers,
S.
Click to expand...
What cover were you getting for 12 euros a month?
Not being funny here but my dog insurance is more :)
what amount and what term against what level of debt?

Re lying on the next policy, all the records are shared so forget about that
 
Always better to be upfront (even at a cost)

From what you say Bank has good equity in the property.
Run with the 80 for a few months. If you find it hitting your finances hard discuss it with bank and ask will they let you waive the life cover.
At worst you can cancel the policy , but I suspect bank would get a bit crankey ,even though the house value covers them.
 
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