Mortgage Repayment Protection Vs PHI

M

moneypitt

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Hi!

I am trying to understand if I should setup a Mortgage Repayment Protection, if I already have PHI from work.

At the moment, I am trying to take out 253K (92% of the value of the property, 40 year FirstActive Current Account mortgage @3.29% ) to buy my first property. At work, I have a life and disability scheme set up (as part of the pension plan, I think) and it covers two third (66.67%) of the salary, less social welfare disability payment, after a deferred period of 26 weeks.

Apart from the first six months of disability, PHI benefit should cover my mortgage payments and more, as long as I am unable to resume work. (For first six months, I may get some sort of benefit from the government, based on the PAYE/PRSI contributions etc?)

Now, does the lending bank have a say in if I should have a repayment protection, or PHI in place? Is it a basic requirement like Home Insurance and Mortgage Protection Life Insurance?

With the above PHI in place, do I need to sign up for a Mortgage Repayment Protection?

Finally, what happens if I change employer, and the new employer doesn’t offer any PHI benefit? Can I start a repayment protection then?

Apologies for the long post, and thanks a million for your time!
 
moneypitt said:
Now, does the lending bank have a say in if I should have a repayment protection, or PHI in place? Is it a basic requirement like Home Insurance and Mortgage Protection Life Insurance?
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No, it shouldn't be although lenders like to imply it is - they make heaps of commission selling these policies (which are often much more restrictive than the sort of one it sounds like you have from work).

moneypitt said:
Finally, what happens if I change employer, and the new employer doesn’t offer any PHI benefit? Can I start a repayment protection then?
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To the best of my knowledge it can be difficult at a later date to start a policy specifically tied to your mortgage but there's no reason why you wouldn't be able to go into the open market to buy PHI appropriate to (but not tied to) your mortgage. If all else failed you could always re-mortgage in those circumstances in which case you'd have no difficulty buying repayment protection (provided your health hadn't disimproved in the interim).

By all means talk to your broker (if you're using one) or to First Active but I fail to see why you'd want effectively duplicate cover unless you are unusually risk adverse.
 
Thanks Oysterman, I am not using a broker (I wish I did, ah wel.. ), and FirstActive was trying to sell me PHI. I guess I will skip both as I already have PHI cover from work - thanks again!
 
moneypitt said:
Thanks Oysterman, I am not using a broker (I wish I did, ah wel.. ), and FirstActive was trying to sell me PHI. I guess I will skip both as I already have PHI cover from work - thanks again!
Click to expand...

So much for "know your customer".......
 
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