Can you stop paying Life Assurance Premiums (relating to a Mortgage)?

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paddyjnr

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Just wondering if a person was struggling to keep up with his/her mortgage repayments, could they stop paying their life assurance premium as part of their budget?
 
Re: Is Life assurance on mortgage compulsory?

Not sure about stopping payments once you've signed the agreement, but we were able to waive the Life Insurance policy on 2 mortgages taken out in the last 2 years. We're both in our 50's so it wasn't worth it for us - the premium would be so high.
 
Re: Is Life assurance on mortgage compulsory?

If the mortgage relates to your PPR, the Life Assurance is essential with most lenders. Re Investment Props, the lender will determine if required.
 
Re: Is Life assurance on mortgage compulsory?

mercman said:
If the mortgage relates to your PPR, the Life Assurance is essential with most lenders. Re Investment Props, the lender will determine if required.
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Excuse me for my ignorance but I dont understand!
 
Re: Is Life assurance on mortgage compulsory?

We got a mortgage on our PPR (Primary Residence) and waived the mortgage protection policy (Mgage with Ulster Bank)
 
Re: Is Life assurance on mortgage compulsory?

Eithneangela said:
We got a mortgage on our PPR (Primary Residence) and waived the mortgage protection policy (Mgage with Ulster Bank)
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Oh I see that is what I could not understand, The person in question has the life assurance on their primary residance and it costs 1 tenth of their montly payments so it's a bit steep..
 
Re: Is Life assurance on mortgage compulsory?

There is a distinct difference between mortgage protection and Life Insurance. In the case of you Primary Residence (family home), a financial institution wouldn't not want to be seen to be throwing a family out of their home in the case that the main earner became deceased and there was no means to continue paying the mortgage.
 
Re: Is Life assurance on mortgage compulsory?

You could try Term Assurance, which is Life Assurance under a different guise. It last only the period of the mortgage and the amount outstanding on same. A little cheaper in cases, but IMO a waste of money.
 
Re: Can you stop paying (Motgage Protection) Life Assurance Premiums?

Hi Pat,

Ive changed the title of your question somewhat to more fully reflect what you are looking for. Let me know if this is ok.

From your original post I'm assuming that you already have a life assurance policy which you have assigned to your mortgage provider. Is this correct? If so, and you stop making the premium payments I assume that you are defaulting on the mortgage agreement with the provider.

Have you communicated your situation to your mortgage provider? Have you asked them what the implications of not keeping up the LA premiums?

aj
 
Re: Can you stop paying (Motgage Protection) Life Assurance Premiums?

ajapale said:
Hi Pat,

Ive changed the title of your question somewhat to more fully reflect what you are looking for. Let me know if this is ok.

From your original post I'm assuming that you already have a life assurance policy which you have assigned to your mortgage provider. Is this correct? If so, and you stop making the premium payments I assume that you are defaulting on the mortgage agreement with the provider.

Have you communicated your situation to your mortgage provider? Have you asked them what the implications of not keeping up the LA premiums?

aj
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Hi, yes that is exactly what I mean, thank you. Yes the question was for a friend of mine (not that it matters) No he has not communicated with the mortgage provider which is TSB.
 
Re: Is Life assurance on mortgage compulsory?

I dont understand the comment about mortgage protection and term assurance??? They're both essentialy the same. Mortgage term Assurance and term assurance are the same except "an assignment" is taken by your mortgage lender. They own the proceeds on death. "Term" just means it's a temporary policy that is over a fixed period i.e. 10,20,30 years. On a level term policy, the life assurance is fixed (unless you ask for it tyo increase with inflation) and the premium is fixed (can increase also with inflation). On a "decreasing term" policy, the level of cover reduces in line with your mortgage repayments.....meaning at the end of your mortgage, no life cover will exist.............So the only requirement for a bank is that you have "decreasing term life assurance".

C

P.S. i heard somewhere that over 50's dont need this. Also, it's not requested by the bank for investment property........You can cancel it after you take it out but if the bank have an "assignment" it can only be cancelled at they're instruction to the life company
 
Re: Is Life assurance on mortgage compulsory?

COLAKO said:
You can cancel it after you take it out but if the bank have an "assignment" it can only be cancelled at they're instruction to the life company
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I know a friend of mine, she's in her thirties, took out a policy when she bought her house and cancelled it when it was due for renewal. She hasn't heard anything from the mortgage company and that was three or four years ago.

Not sure if she is within her rights or not but she's doing it anyway. She has no dependents.

Ruam
 
OK, Before you all start arguing and mf1 leaves posts sounding like she got out of bed on the wrong side.

My solicitor who worked for may years for one of the banks told me that I could cancel my mortgage protection insurance the day after I got my mortgage and there was nothing the bank could or would do about it.
 
Towger, I must disagree.
You can cancel it but if you do and depending on the terms and conditions of the deed of assignment that you signed when taking out the mortgage, the bank may pay the premium due and add this premium to the principal outstanding. This shall be secured against the property. In essence this means that you could be borrowing the money to pay the premia from the lender over the term of the mortgage. This could be very expensive.
I guess this really only happens when you take the insurance cover from the lender as they know when it is unpaid (another good reason to shop around) or if the lender finds out that the premia are not being paid.
In the usual course of events though, the lender is unaware.
 
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