# Mortgage and Life Insurance



## cavanlad1982 (15 Jul 2006)

Hi,
I know a guy who has paid a deposit on a house but had serious heart trouble last month before he took out life insurance. It seems that he needs life insurance to get a mortgage so he stands to lose his deposit as he can't get life insurance at an affordable price. This is second hand info though so the facts may not be exactly correct.

This got me thinking about my own situation. I have a blood disorder called haemochromatosis. It is perfectly treatable though. I having treatment now to any trouble in later life. I am letting 4 units of blood to reduce my iron levels. This may be the last treatment I ever need.

I don't currently have life insurance - only VHI. My employer will pay out 3 times my annual salary to my next of kin if I die but that's about all I have. I am not currently looking to buy a house but will be in the near future. I plan on talking to a financial advisor this week and I'd like to know what the people on here thought about my situation? Should I have any trouble getting life insurance. Do I need it for a mortgage? I am nearly 24 by the way. Thanks.


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## ClubMan (15 Jul 2006)

cavanlad1982 said:
			
		

> Do I need it for a mortgage?


The _Consumer Credit Act _requires that owner occupier mortgage holders have mortgage protection life assurance. This requirement can be waived in some circumstances (e.g. if somebody can't get any or "reasonable" cover due to medical issues) and some lenders may do this. Note that there is a risk with not having such insurance - e.g. if the mortgage holder dies then any next of kin do not have the mortgage cleared for them and must meet the repayments somehow. See this thread and the many others on the same topic:

Mortgage Protection and Mortgage Repayment Protection Policies

See also the [broken link removed] on [broken link removed].


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## cavanlad1982 (15 Jul 2006)

Thanks


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## ilovecheese (21 Jul 2006)

haemochromatosis is treated quite seriously by life insurance companies so best to leave your self PLENTY of time to get a policy in place.


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## cavanlad1982 (22 Jul 2006)

Well basically the only reason I was asking about this was that I will probably buy a house in the next 3 years and was worried about getting mortgage protection. Is there any benefit to me taking out a fixed term policy bearing in mind that I have no dependents and will probably have none for the next few years? Will taking out a fixed term policy now make it easier to take a mortgage protection one out when I apply for a mortgage in 2-3 years?


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## RS2K (24 Jul 2006)

In a word no.

Provided your health doesn't worsen from now that is. How would you select a sum assured or term?


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## cavanlad1982 (25 Jul 2006)

Thanks for the response RS2K but I don't understand your question?


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## RS2K (25 Jul 2006)

I meant how much would your mortgage be in a couple of years and over how long?

You could propose for a whole life policy (no ending date), which could be used.

It's likely be expensive however.


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## cavanlad1982 (26 Jul 2006)

It will probably be a 30 year mortgage of over 300K (based on todays prices anyway). I think I will seek independent financial advice on this. Cheers RS2K.


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## F. Kruger (26 Jul 2006)

Just buy more cover (Level/Convertible Term) than you think that you will need and over a term that will be much greater than the potential mortgage term.

Subject to the policy not being too expensive, you may well then be able to use it again, if you decide to move.

It will cost you nothing to apply for the cover, except, maybe, the time to do a medical, and then you will have a better idea of what terms will be amde available to you.


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## cavanlad1982 (29 Jul 2006)

Thanks for the advice F.Kruger.

Term Assurance
This type of policy will pay a fixed amount on death, irrespective of the amount outstanding at the time. In the event of a claim any excess over the outstanding mortgage balance will be paid to your estate. 

Convertible Term Assurance
Same as Term Assurance above, but the policy also contains an option to continue your cover beyond the term, irrespective of your health at that time. 

Both Term Assurance and Convertible Term Assurance are available with optional Specified Serious Illness cover. 


My question - I can take out the converible term assurance policy now to say cover me for 300,000. Even if my health deteriorates, then I can still continue the policy at the fixed price? Can anybody recommend a good life assurance company in this case? Is this the best way to proceed?


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## liteweight (29 Jul 2006)

Haemochromotosis is a genetic disorder where too much iron builds in the blood. The treatment is quick, easy (relatively) and very succesful if caught while young. In older people it may have caused organ damage. Ireland has the highest incidence of haemochromotosis in the world and its a disgrace that there is no national screening policy. It's a matter of a simple blood test.

Given the above, I can't see why insurance companies should penalise sufferers, it's just ignorance. A good many peoply may be walking around with the disorder, who are happily paying mortgage protection/life insurance at an equitable rate simply because they and their insurance companies don't realise they have it.


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## RS2K (31 Jul 2006)

cavanlad1982 said:
			
		

> ...My question - I can take out the converible term assurance policy now to say cover me for 300,000. Even if my health deteriorates, then I can still continue the policy at the fixed price? Can anybody recommend a good life assurance company in this case? Is this the best way to proceed?....



Yes. If you make a full disclosure now and are offered and accept terms a binding contract will exist.

You can buy life assurance in all kinds of places, but if your medical history is complex, I reckon a good Authorised Advisor with experience in involved life cases is your best bet.


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## cavanlad1982 (1 Aug 2006)

Thanks lads. I going to talk to a broker who is a friend of the family soon. I just wanted some base knowledge first


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## RS2K (2 Aug 2006)

liteweight said:
			
		

> Haemochromotosis is a genetic disorder where too much iron builds in the blood. The treatment is quick, easy (relatively) and very succesful if caught while young. In older people it may have caused organ damage. Ireland has the highest incidence of haemochromotosis in the world and its a disgrace that there is no national screening policy. It's a matter of a simple blood test.
> 
> Given the above, I can't see why insurance companies should penalise sufferers, it's just ignorance. A good many peoply may be walking around with the disorder, who are happily paying mortgage protection/life insurance at an equitable rate simply because they and their insurance companies don't realise they have it.



I'm not a life underwriter, but if a reasonable one had a decision to make on somebody with this disorder, it's only correct and fitting that an appropriate loading should be applied *if* there is an increased risk of mortality.

Insurance is all about pooled risk, and it's absolutely fair that others who have the disorder but are unaware of it should pay normal rates for their life cover.


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