Life BOI Life "whole of life" insurance - worth it?

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dunsink

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Following a recent indexation increase letter from BOI Life in relation to our mortgage/life cover, I called them up to determine the policy type (perhaps I should have known this already, the policy was taken out when got our mortgage 8 years ago).

To be honest, the person I spoke to on the phone wasn't very helpful. I managed to determine that its a "whole of life policy" i.e. not term based. There is 22 years / €168k outstanding on our mortgage, the life cover amount on the policy is going up from €250k to €262k which is costing €120 per month.

To me, this sounds quite expensive, although the additional safety net of the surplus amount in the event of the death of either my wife and I appeals to me.

We are both currently out of work and while I have some redundancy money to play with in the interim (I had hoped to use this for savings :rolleyes:), I hope to be back working soon (next few months). On that basis, I want to ensure that if we're paying what I consider a high rate for cover that it will be worth it in the long term.

I'm in the dark on this one and suspect that I will need to seek professional advice. In the interim, I'd appreciate any input in terms what I should be looking at and considering.
 
Whole of Life policies usually start off quite cheaply and are usually reviewed after 10 years and then every 5 years after that where (normally) you see the premiums jump.

You would probably be better off taking out a level term policy for you and your wife for €250,000 (if you want more than our mortgage amount) for the remaining term of 22 years. This way you know what the premium will be for the whole term and it will clear the mortgage with a sum left over.

If you want basic cover only you could go with decreasing term assurance which will reduce in line with the mortgage.
 
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A whole of life policy is an investment policy and a protection policy in one.
It would be cheaper to take out a cheaper separate protection (life cover) policy with a guaranteed premium and then if you like put what you are saving into an investment policy.

This all depends on whether you can get life cover due to health issues and how expensive it will be.

As shaking said WofL policies are cheaper when you are younger and in good health but get progressively more expensive as you get older so the amount going to pay for the protection increases while the amount invested decreases.

WofL can cover you for the whole of your life obviously whereas term will stop at a certain age.
 
Thanks for the input guys, we're both mid 30's so I'm not sure theres real value in retaining the WofL policy at this point in time. I would also hope to be in a position to pay off our mortgage sooner than expected, perhaps having separate policies to cover mortgage and other eventualities would be pertinent.

I need to do my homework on this one before making a decision, I'm one of the suckers who went with what the bank recommended at the time (our mortgage and home insurance is with BoI also!).
 
Update on an old post:

Last year, I finally got around to investigating options concerned with cancelling this WOL unit-linked policy, as its with BOI, I first approached them to review alternative options (basically, cashing in the unit linked portion, setting up a new life policy). After a number of meetings with the bank and plenty of form filling, my application was reviewed and turned down on medical grounds - basically, I have a form of arthritis, its manageable and doesn't dramatically affect day-to-day life. In fact I'm pretty healthy, I run 5k 3 times a week but thats largely irrelevant and I digress....

So my question is - do I have recourse to challenge such a stance in terms of following up with a medical examination in terms of individual risk assessment? Are certain conditions classed at a particular at level of risk and therefore automatically disqualify an applicant?

I really need to ditch this WOL policy, its spiralling in cost as the years go on and it just not suited to our needs. I fear that we're locked and I'd be interested to hear from others who have successfully switched to other products while being diagnosed with underlying (non-life threatening) medical conditions.
 
You need to make contact with an independent adviser that has access to the full market. The bank are tide agents to one insurer and will only have tried them for cover. Arthritis should not be a declined condition.

I agree that you should move away from your existing policy as soon as you have new cover sourced. It will become very expensive in the years to come and you will end up either cancelling it or reducing the cover to very little.
 
Hi dunsink

When you originally took out the WOL policy for the mortgage did the advisor make you aware that you could have availed of a much cheaper mortgage protection policy?

Under the consumer credit act 1995 the bank only requires a life policy to cover the current mortgage value so therefore a reducing term insurance policy would have been sufficient.

If the bank did not make you aware that this was an option you have a right to complain to the bank and if the complaint is not upheld you can bring this complaint to the financial services ombudsman.

I would ask in the complaint can they document where they offered you a mortgage protection policy and where you declined this offer and the reason why you went against the recommendation and the reason why you opted for a much more expensive reviewable WOL policy.

I know that some forms of arthritis such as rheumatoid do attract loadings of up to 200% but I have only seen out right declines for very severe arthritis, so best go and apply with other insurance companies. Also make sure that you declare on your application that you have been declined by another insurance company.
 
Jimbobp said:
You need to make contact with an independent adviser that has access to the full market. The bank are tide agents to one insurer and will only have tried them for cover.
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Noted Jimbobp, thanks.

Baracuda said:
When you originally took out the WOL policy for the mortgage did the advisor make you aware that you could have availed of a much cheaper mortgage protection policy?

Under the consumer credit act 1995 the bank only requires a life policy to cover the current mortgage value so therefore a reducing term insurance policy would have been sufficient.
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At the time (15 years ago), my wife worked for BOI and being honest, we didn't give it sufficient thought at the time, youthful ignorance if you will. I can't quite remember what sort of advice we were given at the time in terms of product suitability (if at all) although it may be worth looking at the original doc to see if theres anything stipulated.
 
Check your options for other new policies prior to cancelling the DD or the policy, I recently applied for life cover ( decreasing ) and because I had an MRI ( I'm healthy and there was nothing wrong, ) they loaded me by 100% + on the policy quote, jumped from, 60 euro to 189!!!! you will never get a deal like the one you got 8 years ago, that's what I figured out, keep paying it and it's a pay out if something happens even when your mort is cleared..
Call the company directly the bank is just a broker and speak with them. they will explain it to you in detail.
 
Louisa2014 said:
I recently applied for life cover ( decreasing ) and because I had an MRI ( I'm healthy and there was nothing wrong, ) they loaded me by 100% + on the policy quote, jumped from, 60 euro to 189!!!!
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You should challenge this with the insurance company. If there was and is nothing wrong and the MRI proved this, then you should not have been loaded. Obviously you had the MRI for a reason but if it was just an investigation and proved that there is nothing whatsoever wrong with you, then having an MRI itself is not grounds for any company to load you.
 
Hi LD
I did challenge it and was told is I proceed with it, that their medical team could load higher than that, there's no rules on these insurance companies, I even asked my solicitor on it as I was that concerned over the loading ruling....my doctor told me he hears of this all the time...
 
Louisa2014 said:
I did challenge it and was told is I proceed with it, that their medical team could load higher than that, there's no rules on these insurance companies,
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Whoever told you that is wrong. There are rules governing insurance companies. If there is nothing wrong with you and you can prove this, then you can get insurance without any loading.

Ask your GP to write to the insurance company requesting that they explain why you have been loaded. They will write back to your GP detailing why they made this decision. If their information is wrong, then you should correct it.
 
What's that based on? As far as I'm aware there is no requirement for an insurance company to offer life insurance to anyone or at any particular price.
 
Its not the fact that you had a MRI that you were loaded, it was most likely that there was an underlying condition.

The insurance company would not simply load a policy for sake of loading it, there had to be a reason?

The insurance industry do not provide the exact reason to their customers why they are loaded if the information came from their GP. Write to the insurance company and ask them to confirm the reason to your GP and then you will have to ask your GP the reason.
 
BazzaDP said:
What's that based on? As far as I'm aware there is no requirement for an insurance company to offer life insurance to anyone or at any particular price.
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You're right - there's no obligation. But a life insurance company won't load an individual unless there's a reason for it. Having an MRI scan isn't a reason - it's an investigation.
 
BazzaDP said:
What's that based on? As far as I'm aware there is no requirement for an insurance company to offer life insurance to anyone or at any particular price.
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Nope, but they would stay in business very long. For commercial reasons, there is huge pressure on underwriters to offer terms at ordinary rates.

The OP should ask the life company to write to her GP with the reasons for the loading and take it from there.



Steven
www.bluewaterfp.ie
 
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