Mortgage Protection/Life Assurance

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rustbucket

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Im trying to get my head around mortgage protection/life assurance.

My broker has offered the following mortgage protection/life assurance

Amount of Cover: €432,400
Term: 35 years
Best price
Decreasing life cover only €32.23

Decreasing life cover with
€432,400 accelerated serious illness cover €161.58

Decreasing life cover with
€216,200 accelerated serious illness cover €99.52


Level life cover €54.99

Level life cover with
€432,400 Standalone serious illness cover €277.86

Level life cover with
€216,200 Standalone serious illness cover €175.25

I am unsure about which type to get and am baulking at the idea of paying out nearly €300pm to pay for mortgage, life and serious illness cover (although it would be the safest bet.

The protection is for both me an my girlfriend. I have regular health insurance but am wondering if there is any point continuin this if I go for Level Life cover with Stand alone serious illness cover. (the reason I took out health insurance is to cover for any serious illness- Cancer etc, not for the minor things)

If I can claim back minor injury bills and doctors fees etc against tax, is there any point in continuing the health insurance given that If I do get seriously ill my mortgage will be paid and there will be another payout for my illness??????
 
The type of cover you need depends on what you want the cover to do for you. If you have no dependents, no major loans to be paid off and just want the policy to clear your mortgage in the event of either of you dying then you want decreasing cover.

If you want your mortgage to be paid off with a bit left over to go to the surviving party then go with level. Personally I think serious illness is very expensive cover I think income protection is better. S.I. will only pay out if your exact illness matches the life company's list of serious illnesses. i.e. you have to lose 2 limbs not 1 etc before it will pay out. In the event of claims only about 60% actually pay out.

You may want to ask about convertible assurance it's like the level cover accept you have the option to "convert" the policy i.e. start it again 10 years in without medical evidence. So if you're 30 now and the policy is for 34 years when you're 50 you can take out cover for another 35 years for the same amount of cover they have to accept you based on your medical when you took out the plan. means if you develop any health issues down the way you don't get penalised. It's usually only a few euro dearer a month then level.

Hope that helps!
 
Can you get income protection cover on your mortgage protection or life assurance or is that something separate?
 
You can get mortgage income protection it's not as common as regular income protection it's bascially the same as regular income protection. Accept the cover runs until the end of your mortgage as opposed to your retirement age.The same rules apply to it as Income Protection in that the max you can insure yourself for is 75% of your salary less the social welfare benefit and you qualify for tax relief on the premiums.
 
rustbucket said:
Im trying to get my head around mortgage protection/life assurance.

My broker has offered the following mortgage protection/life assurance

Amount of Cover: €432,400
Term: 35 years
Best price
Decreasing life cover only €32.23

Decreasing life cover with
€432,400 accelerated serious illness cover €161.58

Decreasing life cover with
€216,200 accelerated serious illness cover €99.52


Level life cover€54.99

Level life cover with
€432,400 Standalone serious illness cover €277.86

Level life cover with
€216,200 Standalone serious illness cover €175.25

I am unsure about which type to get and am baulking at the idea of paying out nearly €300pm to pay for mortgage, life and serious illness cover (although it would be the safest bet.

The protection is for both me an my girlfriend. I have regular health insurance but am wondering if there is any point continuin this if I go for Level Life cover with Stand alone serious illness cover. (the reason I took out health insurance is to cover for any serious illness- Cancer etc, not for the minor things)

If I can claim back minor injury bills and doctors fees etc against tax, is there any point in continuing the health insurance given that If I do get seriously ill my mortgage will be paid and there will be another payout for my illness??????
Click to expand...


Ask your broker is he price matching it to the lowest in the market.
I'd advise dual level term cover. Both of you are covered individually under the one policy. . And then a toss up between serious illness and income protector(illness or accident). Get a quote on income protector and compare to level term with independent serious illness.

NB you don't have to take out the same amount of serious illness cover as you have in life cover as in your example above. It's about what's affordable to you.

I wouldn't go for for mortgage protection with excelerated serious illness as when a claim is made the amount is payable directly to the bank and your life cover reduces by that amount. Not worth it
 
It's a bit hard to make a call on this without knowing your full circumstances. Is the 'Reasons Why' letter that you received from the broker specific to the mortgage transaction or is it in respect of a full financial review?


Do you have dependent children? Do either of you have 'death-in-service' or salary protection benefits through work?


It may also be a good time to ask the solicitor who is handling the mortgage to draw up a will and establish if there are likely to be any inheritance tax issues in the event of the early demise of you or your girlfriend.
 
There is a big difference between serious illness cover and health insurance. The SIC will pay out when and if you are diagnosed with specific illness and the amount can be used to clear your mortgage if assigned or paid to yourself. It will not help get you diagnosed sooner. Health insurance as in VHI etc might get you to the diagnosis stage sooner if necessary. If you are happy to depend on the public system, which would be great if it worked, then you could cancel your health ins but SIC is not a substitute for health insurance.
 
Thanks guys. We have no children, both non smokers under 30. No income protection either.

I know cancelling health insurancew would be a bad idea but the thought of paying an extra €270-€300 per month sickens me.

Il probably opt for the dual level life cover
 
Firstly YOU ONLY NEED DECREASING TERM MORTGAGE PROTECTION. This is to satisfy you're lender. Basicaly, if you die at anytime after taking the mortgage, the policy will repay whaver is outstanding. If cost is the issue, take this and don't let them persuade you that you need anything else.

It might be worth while getting serious illness also. This would just pay the mortgage if you get one of the illnesses. However, it's expensive.

Secondly, You may have a seprate need for life cover (ignoring your mortgage). This is something you have to examin, get advise and make a decision. If you have kids, a family......then it's a priority. Probably best to keep it seperate from the mortgage.


rustbucket said:
Im trying to get my head around mortgage protection/life assurance.

My broker has offered the following mortgage protection/life assurance

Amount of Cover: €432,400
Term: 35 years
Best price
Decreasing life cover only €32.23

Decreasing life cover with
€432,400 accelerated serious illness cover €161.58

Decreasing life cover with
€216,200 accelerated serious illness cover €99.52


Level life cover€54.99

Level life cover with
€432,400 Standalone serious illness cover €277.86

Level life cover with
€216,200 Standalone serious illness cover €175.25

I am unsure about which type to get and am baulking at the idea of paying out nearly €300pm to pay for mortgage, life and serious illness cover (although it would be the safest bet.

The protection is for both me an my girlfriend. I have regular health insurance but am wondering if there is any point continuin this if I go for Level Life cover with Stand alone serious illness cover. (the reason I took out health insurance is to cover for any serious illness- Cancer etc, not for the minor things)

If I can claim back minor injury bills and doctors fees etc against tax, is there any point in continuing the health insurance given that If I do get seriously ill my mortgage will be paid and there will be another payout for my illness??????
Click to expand...
 
You have no dependants so you do not need any large lump sum, you only need the decreasing term insurance, the cheapest quote you've got. Instead of paying into a product that may or may not pay out (and it's really difficult to get them to pay out) if you get ill, why not save this money and use that instead if you need it (to pay 6 months mortgage or to go private in the health care system). The public health system and VHI/BUPA is really all you need for serious illness...
 
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