Life Insurance

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Mairead

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Can anyone give me some advice on the following.
We have two properties, one an investment and the other our primary residence. We currently have three insurance policies. Two policies that are linked to the mortgage lenders and the other is for a lump sum payment if either myself or my husband died. Because we pay over 300 a month for these three policies, we would like to get rid of the one covering the investment property. Does anyone know if this is possible and more so advisable? I am wondering if the mortgage lender will allow us do it?
 
AFAIK they will. No life cover/mortgage protection is required for an investment property. As backed up in this post from a mortgage broker.
 
Thanks for your reply with this. When I spoke with our Life Insurance company today I was told that a mortgage lender would probably not let us get rid of Life Insurance on the investment property but I had heard before that I could. I dont want any hassle form our lender either, but also do not want to be spending unneccessary money either.
Thanks
Mairead
 
I have stopped paying cover that was listed as a requirement by the lender and they did not even notice. I paid the first year and then cancelled.
You can always get cover again if they make a stink about it but I think that they will not.
 
In general any debt should be covered by life assurance. It can be a basic term policy, which are cheap.

€300 p/m sounds like a lot of money in premiums.

I reckon you shold have an Authorised Advisor check them out to see what's good, and what's not.
 
woods said:
I have stopped paying cover that was listed as a requirement by the lender and they did not even notice. I paid the first year and then cancelled.
You can always get cover again if they make a stink about it but I think that they will not.
Click to expand...

...false economy? What would happen if a party to the loan died?
 
RS2K said:
In general any debt should be covered by life assurance.
Click to expand...

In the case of an investment property, the property can be sold to pay off a debt on death (I don't know what happens in the case of negative equity, probably not that likely given that mortgages on investment properties are generally lower LTV).

In the case of residence, it's better to have insurance as you may have dependents to consider.
 
Hi Mairead,
I recently bought an apt and am using my old home as an investment property - When I got original mortgage about 9 years ago I was advised to take Payment protection against the mortgage which at the time you had to do and then when I got new mortgage for apt I had to take Life Assurance - couldn't understand why I needed to have one on the investment as if anything happened to me the property could be sold etc. Anyway rang investment company last week and cancelled PP policy and also I'm looking for rebate for the months I was paying the two policies as these policies are most likely to be linked to your lender and so I think it's their responsibility to let you know that you don't have to have two policies - I think after alot of people watching Prime Time last week, there will be alot of questions in coming months about policies like Payment protection, life assurance etc.
 
RS2K said:
...false economy? What would happen if a party to the loan died?
Click to expand...
I dont see what the problem is if a party to the loan dies. The building will continue to generate the same amount of income and the payments will continue to be made. The only time that you need to have protection cover is when the building is not generating income (either business or investment) and when the death of the person will lead to an inability to pay off the mortgage.
Otherwise it is just another form of gambling. I am paying so much money a month on the chance that I or my partner dies and if we do then we get the payout. I know that this sounds morbid but it is the truth. I would prefer to invest that money in ensuring that we do not die by eating properly so I buy the best quality food and let the banks do with a little less of my cash. (of course there is that buss that may hit us).
 
Hi Mairead

No Life cover is needed to cover the loan on an investment property.
Life cover is only required on your mortgage for your private residence.

Regards

[email protected]
 
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