Mortgage Protection: Special conditions (medical) were applied

Special conditions (medical) were applied to our mortgage protection policy(start date 1/8/2003). There is provision in the terms of the policy to review the extra premium for additional risks. We pay a premium €251.20 per month which we consider extortionate.

On the original proposal form I am down as a smoker which I gave up on December 17 2004. The insurance company has told us that for them to take into consideration the fact that I no longer smoke we will have to take out a new policy.

Is this legal?
If we are no longer subject to the additional medical risk should our premium not be reduced accordingly?
Will a new proposal form allow me to state that I'm an non-smoker?
Is making a new proposal effectively the same thing as taking out a new policy?
Is there any point taking this to the insurance ombudman?
Does he have any real teeth?

Just my personal views. I am in the business btw.

Your current premium is very high, but it's governed by the amount of cover, the term, your ages, smoking habits, and the state of your health.

Are you sure it's simple mortgage protection (decreasing term assurance). Is there critical illness benefit, or possibly some form of savings plan built in?

To answer your questions specifically.

Is this legal? Probably. Mortgage protection policies are like motor policies i.e. "no claim no value". If you don't need them anymore or if the loan amount or term or smoking habits change they are "throw away". Your existing policy is 2+ years old, and whilst you are older, competition in the market has driven down prices somewhat. Your non smoker status now will, all other things being equal medically, certainly reduce your premiums.

If we are no longer subject to the additional medical risk should our premium not be reduced accordingly? Yes.
Will a new proposal form allow me to state that I'm an non-smoker? Yes.
Is making a new proposal effectively the same thing as taking out a new policy? Yes.
Is there any point taking this to the insurance ombudman? I doubt it.
Does he have any real teeth? Not in relation to underwriting. If you were sold a policy that you didn't need or want, the position would be different. The Financial Regulator might be interested.

My advice is talk to an Broker, ideally an Authorised Advisor, who will be able to access all the product providers.

You can pm me if you wish, without obligation