# Life assurance Policy & Mortgage



## sanjose1 (29 Apr 2010)

I recently started getting calls from my Bank re life assurance policy & the fact that it was not properly assigned (wife's signature missing). They sent out a deed of assignment that basically gives the bank all the benefit & advantages over the life policy. 

My query is this if I do not sign it what can the bank do to me ?. The manager has indicated that it would have to go to their legal dept., As far as I am concerned I have done nothing wrong. My Mortgage is paid up to date & Life policy is in place but suddenly I am been asked to sign something that I am uncomfortable with especially the tone of the legal language. Has anyone had a similar experience or advice on where I stand or should I just sign the document.


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## cearnog (7 May 2010)

The bank is entitled to have an assigned policy if it is in the original mortgage contract.However they can only demand that' life cover only' on 'decreasing term' has to be assigned and this is usually a cheap policy.If you have serious illness cover on that policy,they have no right to demand that it be assigned. Seek advice from a life insurance broker to compare your policy to others on the market


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## tenchi-fan (7 May 2010)

sanjose1 said:


> As far as I am concerned I have done nothing wrong. My Mortgage is paid up to date & Life policy is in place but suddenly I am been asked to sign something that I am uncomfortable with especially the tone of the legal language. Has anyone had a similar experience or advice on where I stand or should I just sign the document.



You'll probably find that the terms and conditions of your mortgage means you have to assign a life policy to cover the loan. By all means seek legal advice (actually a life insurance broker will help you out) but it is completely standard.

It's similar to house insurance policy. The bank will usually want their name noted on the policy. If you cancelled your house insurance you would be breaching the t&cs of the mortgage too.


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## Wishes (8 May 2010)

My life policy, serious illness cover and home insurance is all assigned to the bank.  They wouldn't have allowed me to take out the mortgage otherwise.


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## NorfBank (8 May 2010)

You don't need to assign your life policy or serious illness policy to the bank, in fact you shouldn't. Any benefit on the serious illness policy will be paid to the bank when you might need this for medical expenses. All you need to assign to the bank is a mortgage protection policy. If you can afford a separate mortgage protection policy, you might look at adding one. 

If you just have a combined life and SIC policy then this will have to be assigned.


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## cearnog (9 May 2010)

The banks are commission agents for certain life companys. It is of benefit to them to assign the serious illness cover because it more or less guarantees that the policy wont be cancelled.Serious illness cover is important but dont leave it assigned to the bank, because  you might need that benefit to pay for medical bills.The bank will not release the claim to pay for your bills,they will simply clear their own debt. See a life insurance broker.Serious illness cover should be on level term anyway and yours(wishs) sounds like it is on decreasing term.


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## Financial_Al (10 May 2010)

I echo the other posts. If your mortgage is in joint names then you have to put in place life cover and assign it to the bank. Anything else above this should not be assigned. You are probably paying to much in the first place so I would contact a local financial advisor for some advice and quotes.


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