Mortgage Protection Premium Doubled - Can I just stop paying?

B

Boru

Guest
I took out a new mortgage last year and one of the conditions of the loan was that I obtain Mortgage Protection cover. I did this. This week I received a letter informing me that the premium for the cover I had in place doubled - due to a loading factor (10kgs overweight!!) and the fact that I received a 50% discount last year to sign up in the first year. Can I stop paying the cover? If I do so, will the mortgage company be informed and will i be in breach of the mortgage conditions????
 
If it was a condition of your offer that you have life assurance in place, yes you will be in breach of the mortgage conditions if you cancel your cover.

What will happen? The life assurance company (provided there is an assignment on the policy which there more than likely is or should be) will write to you and copy the lender on your correspondence. The lender will then write to you asking if you have other cover in place. What other action they take depends on the lenders policies.

BTW do you have dependants? If you do, then you really need to think of the consequences of cancelling your cover when you have a mortgage.
 
A lot of mortgage protection companies have half price for the first year - have a look at other offers too.

Sprite
 
Simple answer. Shop around and get a new mortgage protection policy and have the lending instutitions interest noted on the new policy.

Two things. You may be a year older and that may be taken into consideration on the new premium and your health situation may have changed.

Your mortgage may have reduced so you may save money on having a lesser amount secured and the term might be 1 year less.
 
i think most of the mortgage protection policies offer a large discount in the first year. we got 90% off this year (our first) but will have to pay the full amount after that. Ours is VERY high because we both smoke so i got quotes from every company i could and then picked the best.

as long as you have some sort of cover in place your lender will be happy. But i wonder if there would be some sort of clawback owed to the original mortgage protection provider for cancelling so soon into the policy?....
 
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