Mortgage Protection Assurance

[jamesgm]

I have a Mortgage Protection Assurance policy, pretty basic - its pays off our mortgage if either my wife or myself dies, thats it. As seems to be common practive with all insureance companies we got a massive discount year one but now our premium is €615 to cover a €335K mortgage over 30yrs.

Question - whats to stop people taking out a new poicy every year at the massive discounted rate ?

Thanks,
James.

 

[vandriver]

You'd run out of insurance companies ?

 

[TLC]

Gradually the cost will go up because of your age, or because you're medical condition changes. Of course I'd still shop around & see if you can get a better offer else where. You're right to review your insurance on a regular basis (any kind) as a lot of people just keep paying

 

[Mr. C.J.H.]

Gradually the cost will go up because of your age, or because you're medical condition changes.

That's totally incorrect. In actual fact, with a basic Mortgage Protection Policy the premium is fixed for the term of the mortgage, because unlike most types of life insurance, the benefit decreases over the term of the policy, in line with the decreasing capital owed on your mortgage. The fixed premium you pay each month for mortgage protection insurance depends on the size of your mortgage, your age, gender, the state of your health and whether you smoke (at the time the policy was taken out).

I think the OP was offered an introductory special offer rate with his current provider and that the premium has now reverted to 'normal'. To answer the OP's question what's to stop him taking out a new policy every year to avail of a discount? Well, the answer is not a lot. You are of course free to move your provider during the course of the mortgage, but over time and as you get older new providers will start to load your policy on the grounds of your increasing age and any medical conditions that arise resulting in the premiums rising. Nonetheless, if you want to go through the hassle of changing policies frequently well then go for it.