Possible to switch lenders named on mortgage protection policy

P

paddywhacker

Registered User
Messages
102
I applied to NIB to switch mortgage and they told me that my current decreasing mortgage protection policy (the standard one for repayment mortgages) would not be transferable and I would need to take out a new one. Is this true? Bit of a pain as I pay it yearly and it's now up for renewal until September.

Have read a few threads on NIB here and it seems they do try to sell you a new mortgage protection policy at time of application. Will ask my broker but wanted to know if anyone else had been told this and if it is in fact, correct.
Cheers
 
What specific reason did they give for the existing policy not being suitable after reassignment from the old lender to NIB? If the existing policy still covers at least the amount being borrowed then I can't see any reasonable cause for them to object.

If you cancel the existing policy then you can get a refund of premiums paid in advance but which are unused.

If NIB will not allow the existing policy to be reassigned then you should shop around for the best deal on an alternative policy and not just buy it from the lender as it will generally cost more than alternative sources.

See this thread:

Mortgage Protection Renewal
 
They just said that decreasing term policies in general are not transferable which I thought was a bit odd? I got a good deal for it through 123.ie so I don't fancy having to go through all the associated medicals/application forms etc again.
 
I'm not sure that there is anything special about decreasing term policies that makes them non-transferable. But maybe there is. I would have assumed that the only hitch might be if the policy currently covered less than the amount being borrowed in which case additional or alternative cover may well be needed. If you do have to take out another policy then certainly look at shopping around rather than taking NIB's policy which will most likely be more expensive.
 
We were able to reassign our existing decreasing mortgage protection policy to NIB when we switched to them. NIB had no problem with this.
 
Eeyore said:
We were able to reassign our existing decreasing mortgage protection policy to NIB when we switched to them. NIB had no problem with this.
Click to expand...

OK great, the guy I spoke to tried to persuade me black and blue that it wasn't possible and the amount I'm looking to borrow from NIB is actually less than the current amount (as I'm paying some off myself) so perhaps this might be the problem?
 
If the amount that you're borrowing is even less than what is outstanding now and the decreasing term presumably covers the latter then I can't see what the problem is. Unless there is something specific about your policy that militates against transferring it or something. Did your man just say that it wasn't possible or did he say this after checking out the existing policy details/terms&conditions or something? Certainly sounds like a possible attempt at a sales pitch...
 
No, nothing different about the policy, it's just a bog-standard Eagle Star mortgage protection one. The NIB didn't check anything, just asked if I already had MP and then said that the existing policy can't be transferred, and then gave me a quote for a new one. I figured this might be a bit of sales tactic as I was sure it was just a case of changing lenders on the policy. Will talk to my broker and see what he says
 
Is the term long enough? When you switched did you extend the term of your mortgage or add a top up with an increased term? If you didn't and as the amount is less than the original amount there shouldn't be any reason that a policy can't be reassigned to another lender.

The original lender will have to discharge their interest (which they can do once the original mortgage has been redeemed) and forward it back to you or your new lender who will then have it assigned to themselves.

It will have to be done rather quickly though to ensure there is no delay with cheque drawdown on your new mortgage.
 
No, I'm actually decreasing the term (from 33 to 30) and the amount. So it should definitely be OK to do then? Think the NIB guy was clearly giving me a sales pitch, not the best start...
 
It is possible to change assignees, but an increased sum assured or longer term will always require a new policy.
 
Some banks who are tied agents of insurance companies issue decreasing policies under a block policy which effectively means it is not a stand alone policy and cannot be given to another bank. Dont know about the EBS but this is definetly the case with at least two lenders. Might be an explanation for it.
 

No, as I said before it's a bogstandard Eagle Star policy I got from 123 and the amount covered is to be less as is the term. Will take NIB up on it when I get further down the line with the mortgage switch...
 
You must log in or register to reply here.
Menu
Log in
Register