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It’s actually quite alarming the amount of people we talk to that were convinced that they had to take out their mortgage protection through their mortgage lender! Not only do you not have to, it’s illegal for them to tell you that you have to.
You are quite within your rights (and it would be the sensible thing to do!) to take out your mortgage protection with any life company that is offering you the best terms and premium. So for example, if you have 23 years left on your mortgage term and €191,000 outstanding balance, and there is an option to cover this for €20 per month cheaper than what you are currently paying, then you can apply for the new cover. In that example, that would be €5,280 of a saving over the mortgage term!
Obviously, you should never cancel existing cover until new cover has been accepted and put in place. With the cost of cover for females about to increase this year due to the gender directive, it’s neven been as good a time to do a comparison.
Dave.
we have insurance independantly of our mortage lender…
i think we got rid of mortage protection or payment protection correct me if i am wrong…
but what we got rid of was something that would help pay the mortage for x amount of time if dh was out of work…however just before my dh was due to be made redundant we got an ammendment letter that said that there was terms and conditions changes…ie it meant that they would pay mortage payments if unemployment occurd but it would not cover in the event ie if contract work and also had to be in employment for 6 months and also payment protection would not be paid if there was pre warned redundancy due…in our case dh knew he was going to be made redundant turned out 1.5yrs before it happened, also he was going to be then on contract work thereafter…
as it turned out he was made redundant on the fri, was contracted for 2 months on the tues…and each month since then 1.5yrs ago nearly continous contract but it was reviewed each month…which for us we would never benefit from the protection payments so we cancelled it as why pay i think 75e per month not to be able for the forseeable future avail of it….
he’s been very lucky at the moment he’s secured contract until 2014…and has stayed in the same business he has always been in, but in a different area…he was wise in the 1.5yrs prior to redundancy he retrained in various areas that are in his sector that they would outsource…making him quite the person to hold onto…and is lucky he has met various contacts over his years to be able to availof his service and along the way help to train friends and family in areas to help even the chance of some employment if it came their way…so in one way..we are lucky…but still i think some may think mad to have cancelled but in another why fork out if we would never ever get to avial of it that works out to be e2,250 saving in the last 30 months not having to have paid it, which could be used as over payments on mortage allowing build up and then taken off mortage…
Yeah Scole, Payment Protection Insurance (or PPI as it is often referred to) was widely (and often inappropriately!) added on to people’s mortgages and in many cases, they would never be possible to claim on. Mortgage Protection (as opposed to mortgage payment protection) refers to the life and/or serious illness cover that protects the mortgage against death of one of the borrowers. While some also added serious illness cover as well, this was not compulsory.
The type of Mortgage Protection someone should have, depends on their own personal circumstances. For example, parents who have little or no other cover, may well opt for a better type of Mortgage Protection policy to cover the personal shortfall. A recent study shows that almost half of Irish parents have no life cover outside of their mortgage life cover! In 2009, there were approximately 6,500 deaths under age 65. That’s a lot of families unexpectedly losing someone. 4,200 of those were male. When you add to that the 30,000 NEW cancer cases every year in Ireland (expected to rise to 40,000 by 2020) it’s ludicrous not to spend a little time making sure appropriate cover is in place and affordable.
As I’ve often said, it costs nothing to review and it could well save people money.
we have that alright and not with mortage lender….
it’s awful to think that PPI is added to people and when you think the amount you could save especially if you can never use it…dreadful it was the first to go when dh was made redundant
We’ll probably follow the UK in how PPI that was mis-sold is looked at. In one case I was advising a lady who had just applied for her mortgage with her bank manager and was seeing me to look at ther mortgage protection options. While going through details I saw that she had just taken out PPI with the bank manager on the new mortgage. Her only source of income was rental income and maintenance, so she could never possible have been allowed claim for loss of earnings! I rang the bank manager to point this out and he just stammered that "one of the staff must not have understood properly". I later found out that it was actually him that explained the product and filled out the forms for her!
19 out of 20 people I talk to, are still not sure what exactly they have and what they should have. Even when they know the level of life or illness cover, they don’t know how long that would replace any financial loss sufferred in the event of death or serious illness.
I tried to claim on my ppi and the back told me i had left it too long to put a claim in, i put the claim in 4 months too late, back dated claims will only be paid 6 years from the date of finishing work, my claim form was 4 months over that date!! 🙄
I once had a couple who needed to apply for mortgage protection for an increase on their mortgage. During the meeting and after hearing them answer a few questions, I pointed out that they had serious illness cover in place and could most likely make a claim based on what they had told me. They had taken it out a few years before without understanding it and had no idea what it was for! Their claim was paid out a few weeks later for over 100,000 euro! They then got me to meet with their brothers and sisters to advise them. (And they no longer needed the mortgage top up!!)
I’ve just had a last minute cancellation for this evening so if anyone in the general Drogheda area wants a free review without waiting for an appointment, let me know before 7pm 😉
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