# Contracts signed, but can't get life cover



## watpoae (4 Nov 2012)

Hi, 

I am in the process of completing the purchase of an apartment.  I signed contracts and paid relevant deposits about 3 weeks ago and then went about securing necessary life cover in order to draw down funds.

I applied with Zurich Life as I have a separate PRSA in place with them. Not thinking there would be any issue with getting life cover, I was informed this past week that they have declined my application. In a panic, I got in touch with an independent broker (which in hindsight I should have done in the first place) who then submitted applications to both Irish Life and New Ireland. Irish Life came back the following day and declined me also, I am still waiting for word back from New Ireland. At this stage, I doubt I'm going to get cover as I know that info is shared between underwriters.  

My guess is that they are refusing to grant me cover based on past medical history, specifically that I had cancer when I was a teenager.  The most annoying part of this is that my last treatment of any kind for this was in 1996 and I was actually given a full discharge from follow ups/check ups from my consultant in Aug, 2010 (i.e. you never have to come back here again!). So despite being cancer free for over 16 years, being given a full medical discharge by my consultant over 2 years ago, it seems that this is still somehow an issue for the underwriters (I am going to ask my GP to request written confirmation from Zurich as to the reason for me being declined).

I know that if I get a refusal from New Ireland that I can in theory request a waiver from my bank on having life cover but as I am a sole borrower on the mortgage, I am doubtful they will allow this waiver.  I have read some similar type posts here but has anyone had any recent experience of a similar situation re: life cover? If this whole thing falls through I am going to be left in a horrendous position.


----------



## wbbs (4 Nov 2012)

Who is your bank?   Several of the banks allow this under the waiver system, yes it is not ideal if you are a sole income earner with dependants but you may have no option.  If your lender does not allow waivers then start applying for mortgage elsewhere to one who does, only option!


----------



## watpoae (4 Nov 2012)

I'm with AIB. I am the sole income earner but do not currently have any dependants so not sure where that leaves me. At this stage I will probably lose my deposit as I have signed contracts. Hindsight is everything but I honestly did not think getting life cover would ever be a problem. Its turning into a genuine nightmare.


----------



## leroy67 (4 Nov 2012)

Life Insurances company decision will have been made based on available medical information furnished to them by those who attended you. First thing to do is ask Zurich to write to your Dr. giving their reasons for refusing cover. Once you have this you will in a stronger position to understand reasoning behind decision and gather further medical information if needed. In some cases once proposer is cancer free for a period of 5 years they do grant cover however usually at a higher premium for a specified time.


----------



## wbbs (4 Nov 2012)

Ask AIB tomorrow if they will accept waiver, if not start immediately applying elsewhere to any bank that will, maybe try a broker.


----------



## Jimbobp (5 Nov 2012)

Leroy67 is correct. You will need to find out exactly why Zurich declined you ( I recently processed a case with them for a client that had cancer previously and received standard rates, so there may be a combination of factors contributing to the decline). If all else fails ask your broker to try Pulse Insurance, a specialist life company that will often quote clients that can't get cover elsewhere.


----------



## watpoae (5 Nov 2012)

Thanks for all the replies.  I am in process of requesting my GP to write to Zurich to request further information on reason for turning me down.  Will also get in touch with AIB.

Cheers.


----------



## Mynydd (5 Nov 2012)

I was in a similar situation as you watpoae, and signed a waiver as assurance companies like Irish Life refused me. I applied last year via 123.ie just to try as I have dependants now and to my big surprise Zurich accepted me, not even a premium.


----------



## leroy67 (5 Nov 2012)

Hi OP,

If you ring Zurich they will write to your Dr. Will probably be quicker this way


----------



## mobileme (5 Nov 2012)

I got mortgage protection from Caledonian Life with some, but not excessive loading due to medical history. This was on advice from labrokers.ie (based in greystones) who talked me through my options on the phone.


----------



## Marianne (7 Nov 2012)

watpoae said:


> I'm with AIB. I am the sole income earner but do not currently have any dependants so not sure where that leaves me. At this stage I will probably lose my deposit as I have signed contracts. Hindsight is everything but I honestly did not think getting life cover would ever be a problem. Its turning into a genuine nightmare.


 
I don't want to make you feel any worse, but in theory the vendor can also sue you for non-completion. That said, their legal advisor would need to think it was worth their while doing so. 

Carry on following the advice given above. But if that fails, there's another possible solution. 

(1) Apply to a difference life insurance company. Lie about cancer and any other health history. Receive policy document from life insurance company. It's not worth the paper it's written on because you lied.

(2) Produce policy document to AIB who issue the mortgage cheque.

(3) I believe that you should be able to get cover in the normal way eventually, given the length of time since you last had treatment. I'd imagine that insurance companies may want to see a bit of extra time passing since the August 2010 discharge. There's also the possibility that the insurance companies aren't aware of the August 2010 full discharge. Worth checking. 

Anyway, in due course you should be able to get cover properly at which time you can cancel the dud policy.

It's ethically questionable, but who's the loser?

(a) Insurance company don't care as they've collected premiums for nothing and wouldn't pay a claim.

(b) You get out of a hole.

(c) In the unlikely event that you die of cancer before you've managed to secure replacement life insurance, AIB can repossess the house.


----------



## wbbs (7 Nov 2012)

Nice theory but it won't work, there is a central register insurance companies use and it will show op was turned down by one company already.

Other than that obvious flaw I would nearly go with it as a plan if the bank didn't allow a waiver.


----------



## Marianne (7 Nov 2012)

wbbs said:


> Nice theory but it won't work, there is a central register insurance companies use and it will show op was turned down by one company already.


 
In practice many insurance companies can be very slow to update the AR register.


----------



## wbbs (7 Nov 2012)

Might work so!


----------



## Time (8 Nov 2012)

Has worked many times in the past. People who know they will be refused just apply for a dud policy, drawn down the monies and then cancel the policy.


----------



## shigllgetcha (9 Nov 2012)

watpoae said:


> At this stage I will probably lose my deposit as I have signed contracts.


 
Did your contract not have a clause to cover you if you couldnt draw down the mortgage or get life assurance? Our solicitor put it in without us asking him to

Id start applying with every company going if I were you while you try to get zurich to play ball


----------



## watpoae (10 Nov 2012)

Marianne said:


> I don't want to make you feel any worse, but in theory the vendor can also sue you for non-completion. That said, their legal advisor would need to think it was worth their while doing so.
> 
> Carry on following the advice given above. But if that fails, there's another possible solution.
> 
> ...



_*Should have word back from New Ireland Assurance on Mon/Tues re: cover.  Don't expect them to grant me cover as I've been turned down by two  other companies.

I did speak with AIB and informed them of the  current situation. They said that once I have been refused cover from  three separate insurance providers, I can apply for a waiver. I also spoke  to Financial Ombudsman who directed me to read up on the Consumer  Credit Act 1995, Section 126. It basically says that the clause for  having life cover can be ruled an exception in cases where you are a deemed to be part of a  "class of person" deemed not to qualify for life insurance cover. At this stage I'm working on assumption of having to go down the waiver route.

I am aware that vendor could potentially sue me for non completion. That's their right but as it stands, I won't have much more to give them past the deposit.

If I had just lied in the first place, none of this would even be an issue.
*_


----------



## wbbs (10 Nov 2012)

True, but you would be paying for pointless life cover that wouldn't pay out.   AIB are going to allow you sign the waiver so that's the best solution at the moment.


----------



## watpoae (10 Nov 2012)

wbbs said:


> True, but you would be paying for pointless life cover that wouldn't pay out.   AIB are going to allow you sign the waiver so that's the best solution at the moment.



Yes, the life cover would be null and void but I at least would be able to draw down funds and meet my completion date. Anyway, hindsight is great after the fact, hopefully I can get waiver with AIB and put an end to this whole sorry saga!


----------



## orka (11 Nov 2012)

Marianne said:


> But if that fails, there's another possible solution.
> 
> (1) Apply to a difference life insurance company. Lie about cancer and any other health history. Receive policy document from life insurance company. It's not worth the paper it's written on because you lied.


 


watpoae said:


> _*If I had just lied in the first place, none of this would even be an issue.*_


For all but very low level life cover, insurance companies will usually look for at least a report from your GP and a GP's report plus a medical at higher amounts of coverage.  Unless your GP is willing to lie for you too, this really doesn't stand a chance of working and you will have been caught in a very obvious lie.


----------



## Time (11 Nov 2012)

If you stick to the basic facts non smoker, social drinker and go to the very big names that do internet cover they will never look for a GP report.

It does work if you know exactly what you are doing.


----------



## Mynydd (11 Nov 2012)

Time said:


> If you stick to the basic facts non smoker, social drinker and go to the very big names that do internet cover they will never look for a GP report.
> 
> It does work if you know exactly what you are doing.


 
The contract is void: very nasty for your spouse/dependants/estate if you die before mortage is paid off! The insurance company will investigate the claim, there is no doubt about that


----------



## wbbs (11 Nov 2012)

I think the op knows that, it is just to get around the issue and draw down the mortgage.


----------



## Bonnielass (14 Nov 2012)

OP did you hear back from New Ireland yet? I have 2 friends in a similar situation and are frantically searching for a company to assure them.


----------



## watpoae (17 Nov 2012)

Bonnielass - yes, got confirmation yesterday that they have declined me also. I talked to AIB Mortgage Lending yesterday and they have said that they actually process quite a lot of applications for life cover waivers for mortgages.  I have to submit the confirmation letters from the three companies that have declined me to them next week and they will come back with decision on waiver within 48 hours. I hope to have everything finally sorted within two weeks.

They made it seem pretty routine to be honest which is some reassurance. Then again, I won't believe this is all finally sorted till I have the apartment keys in my hand!!


----------



## shigllgetcha (17 Nov 2012)

until the bank writes the cheque youll be on edge

hopefully AIB can sort you out


----------



## watpoae (27 Nov 2012)

And......still it continues.

So much for relying on AIB to issue me with a waiver. After sending them original letters from each of the insurers (x3) who declined me life cover, their lending department said they would not issue me with mortgage funds until I had 30k worth of my own life cover in place. I then had to state the bleedin obvious to them, i.e. it is due to me being flatly rejected for life cover that I applied for the waiver in the first place. At this stage I can't even go down the road of applying for this 30k worth of cover as it would be more than likely a full week or more before they get back to me (and the answer will more than likely be no). AIB then countered and said that the real issue was due to the fact I was looking to borrow 92% LTV. I asked them whether me adding additional funds to my application and thereby reducing the LTV would help? They then came back to me later today and are now looking to reduce the LTV to 75%. This works out to a further 30k they now want me to stump up. If I can't do it, the whole thing falls through. You'd swear I was looking to borrow over 500k but the actual total I am looking for is nowhere near this.

If I do succeed in getting this mortgage drawn down, out of sheer principal I will be closing all of my accounts with AIB and moving them elsewhere. Couldn't stomach them making any additional money from me outside of the mortgage....if they ever give it to me.


----------



## watpoae (8 Dec 2012)

Finally got this sorted with AIB but had to put up additional funding to bring mortgage LTV to 83% (was 92% originally).

For anyone else in same position, it may help avoid lengthy hassles on securing mortgage funds with AIB in the event you can't secure life cover by asking them if they require further funding from your end. 

Thanks to everyone who commented on the thread.


----------



## shigllgetcha (10 Dec 2012)

good it hear it all worked out


----------



## Brendan Burgess (10 Dec 2012)

Hi watpoae

Well done, but I think you are being hard on AIB. 

They would be taking a big risk by giving you a 92% mortgage without life cover.  

They are still taking a risk at 83%, but not as big a risk.

I don't think that many people would be in a position to up the deposit from 8% to 17%, so I wonder what they do? 

Brendan


----------



## jonq74 (13 Dec 2012)

had a similiar issue with AIB in 2009. they point blank refused to even consider a waiver because of the ltv being 92%... in answer to Brendans question they refuse the mortgage application as the condition has not been met...eventually i did get life insurance. Its probably their policy that the risk is too high at 92% for a waiver to be allowed.


----------



## WindUp (13 Dec 2012)

watpoae said:


> Finally got this sorted with AIB but had to put up additional funding to bring mortgage LTV to 83% (was 92% originally).
> 
> For anyone else in same position, it may help avoid lengthy hassles on securing mortgage funds with AIB in the event you can't secure life cover by asking them if they require further funding from your end.
> 
> Thanks to everyone who commented on the thread.


 

Was there anyway you could have gone to 80%? that extra 3% would have dropped your interest rate by 0.20% into the LTV <= 80% bracket


----------



## Hybrid Boss (14 Dec 2012)

for people that cannot get life cover. Some jobs have death in service benefit. If you have it mention this to the lender if your requesting the life cover to be  waived it will give the lender additional comfort when they are making their decision to waiver the life cover.


----------



## HouseBuyer10 (14 Jan 2015)

Hi there, I was wondering if someone can explain to me what happens in the following situation:
- my husband and I have a joint mortgage and we have applied for mortgage protection insurance
- I get refused but my husband gets it
- the bank waives it for me

If my husband dies first, the bank will pay his part of the loan. 
What happens if I die first?

Thanks a mil.


----------



## Monbretia (15 Jan 2015)

The mortgage remains and he continues paying.

It's not that the bank pays his part of the loan if he dies either, the life insurance company pays out on the policy and the mortgage is cleared from this.  However in your case there is no policy so nothing would change and the mortgage would continue as normal.


----------

