Does life policy term have to match mortgage term?

D

Dr Strangelove

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We have a life policy of €250k outstanding, declining balance with 15 years to run. Policy was taken out with our current mortgage and is assigned to the lender. We've paid down the mortgage a bit faster and it is now at €150k

We are thinking of moving house and topping up the mortgage to say €250k or some amount just lower than what is outstanding on the life cover. It would suit us a bit to push out the term as well to maybe 18 or 20 years which is longer than the 15 years on the policy.

For various reasons we'd like not to have to seek a new life policy.

Will the lender insist that the term of the mortgage is no longer the term of the life policy? For example we take a mortgage for 18 years the sum outstanding will be trivial when the life policy expires in 15 years.
 
They more than likely will, Consumer Credit Act says it must be, in theory the only way they could let off was to do a waiver if you fit any of the other criteria, ie over 50, not living in it, too expensive cover or declined. In more lenient times a waiver would be the obvious answer and you just keep the policy you have but these days I doubt there is much leeway or discretion.
 
We experienced this when switching, each time the lender asked for verification from insurance company of balance and time remaining on policy and it always had to as large and long as the new mortgage - wasn't an issue as mortgage balance was reducing faster than policy schedule and timeline was in line.
 
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