Mortgage protection insurance worth changing each year to get discount rate?

[cara mc k]

Dear AAM,

As trying to save money, I rang around to get quotes for my mortgage protection insurance, I noted that a lot of the brokers were saying for year 1 they will give you a discounted rate and then year 2 goes up in cost.

It got me thinking, what is there to stop me from changing every year to a new provider to get a discounted rate, as it is one of the more straightforward insurances, i.e. mortage paid off if either party dies.

What do you think?

Cara Mc K

 

[Yellow Belly]

This practise I think is known as "churning" & may be even illegal?

 

[peteb]

Its only churning when a broker does it for you to get the commission like that as life policy commission is front loaded! Its fine for an indivdual to change their own provider!

The only problem with it is that as you get older the cost of life assurance increases. Also if you develop medical problems at a later date you will probably have trouble getting cover!

 

[Pantone]

Yes I too was wondering about this. I got a renewal quote for our mortgage protection cover this month. We only took out our first mortgage this time last year. The renewal quote seemed like an awful lot of money so I got on to 123.ie and got a new quote which was more than a third less, plus for the first year there is 50% off, so in effect it is two thirds cheaper that the renewal quote. This is quite a lot of money to be saving. I am wondering though, is there a catch? Is it normal for people to swap between insurance providers on a yearly basis? I wouldn’t want to be continually swapping, but I do think that with a saving of this much money (over €600) that I would be mad not to make the swap this time. I would be interested to hear other people’s opinion on this???

 

[spursfan1234]

of course you can swap whenever its up for renewal. perfectly legal

 

[Sumatra]

Careful, technically these type of policies (unlike car or house insurance)DO NOT renew on an annual basis. That's an important point. Also the insurers (the ones who pay in the event of a claim) are not the ones giving the discount - the brokers are.