Home Mortgage Protection

Hi. I have a query somebody might be able to help with and forgive me if this is a long post. Due to severe personal cash flow problems last year - largely as a result of my business almost collapsing - I stopped paying mortgage protection payments about a year ago although I maintained the monthly mortgage payments and I am not in arrears. Due to a heart murmur and an underlying heart condition called mitral valve regurgatation, my monthly mortgage protection payment was around €680 per month on a mortgage of €570k. Since I stopped paying the monthly payment to the life company, I have needed heart surgery to repair the heart valve (3 weeks ago) and I have been told by the cardiologist that the operation to repair the valve was a success and that it is as good as new. Since I have come out of hospital the bank with whom I have my mortgage is now looking for details of my mortgage protection policy to have it assigned. So I have a few questions
1. Given that I am only out of hospital a few weeks and in recovery mode, how difficult will it be for me to get mortgage protection?
2. Given that the underlying heart valve issue has been repaired, will this lower or increase my monthly payments (assuming I get the cover required).
3. What are the implications for my relationship with the mortgage bank?

I fully understand that this was a silly thing to happen. However my business suffered considerably over the last two years and it was a question of living day to day. I think the worst is over and I am in a position to resume monthly mortgage protection payments if there is a life company that will give it to me.

thanks in advance for any advice

Well the first stage would be to apply to an insurance company who will as part of the process write out to your gp and request full information including hospital reports. If the gp doesn't enclose these, a request (and large fee) will go to the consultant for a full up to date report.

After everything is received, possibly medical etc, they could postpone the cover for a period of 6 or 12 months where you will have to reapply for the cover and updated reports submitted.

It sounds as if the problem has been, at least partially, rectified. If your mortality rate has improved, your consultant and the insurer's medical committee will help ascertain that - your premium may reduce ie a smaller "rating" or "loading" although it depends on the age when you first took out the policy as the cost is also determined by your age, smoker status.

Your local friendly, knowledgeable broker should be able to help you. They could be able to save all the paper work by having a chat with a number of underwriters to gauge the requirements and likelihood of obtaining cover.

Patrick

We recently received notification from our broker body, that a new life insurer called 'Pulse' will start trading in Ireland. They promise to offer cover for those that can't obtain life cover on the standard market (or who are been loaded too heaviliy). If all else fails with the insurance companies you go to, ask a broker to check out a quotation with them.

www.powerinsurances.ie

Was it a condition of your loan that you were to maintain mortgage protection cover? Why did the bank take over a year to contact you about your lapsed policy - they should have done that within the time you could have reinstated it? If you required mortgage protection and couldn't get it at a fair premium were you offered other options that you could avail of now? I wouldn't call EUR680 a month very fair. The PIBA union have negotiated a special deal for brokers with adverse lives on their books and the premiums are promised to be very lucrative - for the broker not the customer I'm afraid.

Sumatra said:

Was it a condition of your loan that you were to maintain mortgage protection cover? Why did the bank take over a year to contact you about your lapsed policy - they should have done that within the time you could have reinstated it? If you required mortgage protection and couldn't get it at a fair premium were you offered other options that you could avail of now? I wouldn't call EUR680 a month very fair. The PIBA union have negotiated a special deal for brokers with adverse lives on their books and the premiums are promised to be very lucrative - for the broker not the customer I'm afraid.

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Can you quantify what you mean by that? Yes, brokers get paid commission by most life insurers but surely the objective for the OP is to get the best cover for the best price on the market? Why would he forgo a cheaper policy because a broker would get commission (my impression with Pulse insurance is that the commission would be less than the standard on the market)?


www.powerinsurances.ie

First of all Life Assurance companies set premiums not brokers, so if the premium is high it is normally the insurance companies fault not the broker (assuming the broker is doing his job right and acting in the interests of the customer).

Premium levels are dictated by

- the age of the person
- the sex of a person
- the sum assured (in the op's case this is substantial)
- the term of the policy
- smoker status
- health status

It seems that the OP was rated given the high level of premium that was being paid.

In regard to the new Pulse product underwritten by Lloyds, my understanding is that there is a maximum term of 10 years on this product so it may or may not be viable to satisfy the lender depending on the term left on the mortgage. I have been given no indication of premium levels/commission as they are only doing presentations in this country in late March. I imagine that premiums will be expensive given the fact that they will accept impaired lives but it is an option to look into.

The OP should in the first instance apply for a normal mortgage protection policy and see what an underwriter feels about offering cover. If cover is declined by a couple of companies then the lender may accept that getting cover is impossible and leave the mortgage as is given that the mortgage is not in arrears. If special terms are offered then shopping around a couple of companies may help as you could choose the best premium being offered. As mentioned if you ring a good broker and explain your medical condition, then they could check with a couple of companies to see which would be most receptive to offering cover.



www.CheaperLifeAssurance.ie

The poster stopped paying MPP a year ago but the bank is only now looking for the policy? Why only now? Is the poster telling us the full and complete story? Assuming the policy was assigned to them and if they were doing their job they would have contacted the payer on notification of non payment of premiums from the insurer months ago when there as a window of opportunity and the policy could have been reinstated.

Before the operation the poster was paying one of the highest loadings I've come across. Suggesting 'Pulse' at a high premium with a lower term than required isn't going to solve anything or contacting a broker when the chap is only out of hospital after heart valve surgery isn't going to get him anywhere. I assume there is follow up required so he'll be postponed.

If the detail the poster gave is accurate then the banks apparent lack of following procedure is the key to this posters solution.

1) Banks regularly dont follow up lapses in life cover assigned to loans for long periods of time. Irish Banks are far from perfect as anyone watching the news knows.

2) Even if they did follow up, the OP couldnt afford the policy so the OP would have the same problem as he has now.

3) We dont know the term of the loan left so 10 years may be enough or may not, dont rule it out as a solution when we are not in possession of all the facts. It was simply a suggestion.

4) Given the large loading, Pulse may or may not be cheaper than what the OP was originally paying. I havent received rates from them yet so I imagine you havent either.

5) Getting postponement or declinature letters from life offices demonstrates to his lender that the OP is at least trying to rectify the situation. If the lender sees a genuine effort has been made then they may be willing to forgo the requirement, particularly if the OP is close to age 50 when life cover is not necessarily required.

6) The banks tardiness in this matter is no solution to the matter as the OP was still in the wrong as far as they are concerned in letting his policy lapse.

The best way to proceed is to apply with a couple of companies and demonstrate that the OP cant get cover due to his medical ailments but has made a genuine effort to do so. This will at least show the lender that the OP is trying his best to remedy the situation.

So you think you know all about a deed of assignment? ):

Sumatra said:

So you think you know all about a deed of assignment? ):

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No I think that insurance companies and banks make mistakes.

I'm trying to give the OP some options based on my experience in the market which is the purpose of this website.