Do I have life insurance???

DrPhilG

Sounds like a silly question I know...

Basically I have a mortgage with PTSb, had it since 2006. I do vaguely remember arranging life cover when I was buying the house but I remember the renewal coming in with a substantial increase so I had intended to do some shopping around but it slipped my mind and I ended up never renewing.

I'm in the process of moving house, and keeping the original property to rent so I'm back at the stage of looking at life cover as a nessecity for the mortgage on the new house (small mortgage, only €50k).

My new bank (not PTSB) reckon that I must have some kind of cover as PTSB would insist on it as a condition of my mortgage. Letting it lapse would not have been an option so my bank manager thinks that there must have been a policy assigned to PTSB and I'm paying for it as part of my mortgage payments without realising it.

Is that possible? I honestly don't think so!

And another point, I'm on that increasingly rare breed, a PTSB tracker at 3%. I know they'd do anything to get me off it, so I'm reluctant to call them and ask if I've got any life cover or mortgage protection with them in case they use the fact that I don't as an excuse to boot me off the tracker because I'm breaching terms or something.

Anyway, before anyone scolds me, I know that it's mental not having life insurance so along with taking out mortgage protection cover for the new mortgage, I'm looking into a life term policy.

Pablo Sanchez

Just check your direct debits, if your paying a monthly premium to a company it will appear there. Did you arrange the mortgage with the bank or through a broker? If its a broker give them a call and find out. If you arranged your mortgage with the bank and your life cover through them then they should have a record as to who you did it through, its likely Irish Life if your a PTSB customer.

DrPhilG

Pablo Sanchez wrote: »

Just check your direct debits, if your paying a monthly premium to a company it will appear there. Did you arrange the mortgage with the bank or through a broker? If its a broker give them a call and find out. If you arranged your mortgage with the bank and your life cover through them then they should have a record as to who you did it through, its likely Irish Life if your a PTSB customer.

I just have a single DD each month for the mortgage and the amount exactly matches the amount that is on each letter I get saying my payment has changed due to a interest rate change etc.

When I took out the mortgage the insurance was arranged via a broker not the bank and it was that broker who sent out a renewal premium that I did not take up.

The more I read what I just typed it's pretty clear that I don't have any insurance. It's my bank manager who has been convinced that I must have!

That takes me back to my other question then. Could PTSB give me hassle for not having insurance and try to void my tracker? I will have insurance pretty soon.

Pablo Sanchez

If your worried then just dont tell your bank. If your policy lapsed some time ago, your bank would have been informed, but during the heady celtic tiger days the banks were too busy writing new business to care what their existing customers were up to!

leduigs

I'm pretty sure you can't have a mortgage without the Life Assurance, its not actually health insurance encase that's what you are referring to.

The bank should and probably are still charging you as they set the whole lot up under the one payment. Brokers will work differently. Hope this helps but ask if you need anymore help.

Pablo Sanchez

leduigs wrote: »

I'm pretty sure you can't have a mortgage without the Life Assurance, its not actually health insurance encase that's what you are referring to.

The bank should and probably are still charging you as they set the whole lot up under the one payment. Brokers will work differently. Hope this helps but ask if you need anymore help.

If the OP is paying the bank directly to be part of their group Life cover scheme it would show up on his annual mortgage statment as a directly monthly charge that is lumped into his mortgage payment.

As he mentioned he dealt with a broker and received a renewal notice, its unlikely.

broker2008

You could take out alternative cover and keep the policy yourself rather than giving it to the institution. So you have the cover without the bank telling you what to do. This will give some type of flexibilty if you are every remortgaging (remember that?) again.

DrPhilG

broker2008 wrote: »

You could take out alternative cover and keep the policy yourself rather than giving it to the institution. So you have the cover without the bank telling you what to do. This will give some type of flexibilty if you are every remortgaging (remember that?) again.

Well Ulster Bank require the mortgage protection policy to be assigned to them so I'm going to go with my initial thought...

Take out a small mortgage protection policy against my new €50k mortgage, will only be about €12 a month, assigned to the bank.

Then I'm just going to take out a life term policy for 35 years for €200k, that will cover both mortgages and some to spare.

phormium

There is no straight answer to this question, banks differ in whether they assign the cover or not. There is a requirement to have life cover in place on a mortgage on your own residential property, except for a few exceptions which we will ignore for simplicity.

This insurance could have been done many ways, you could have taken out your own policy through a broker and assigned it to the bank, you could have taken it out with broker and just given a copy to bank, it could have been through the banks tied insurance company in which case it could have been a separate payment to your mortgage or it could have been included with the monthly mortgage repayment.

While every lender will insist on life cover being in place when you get the mortgage there is not much they can do to ensure you keep it in place, if it was assigned to the bank then they will know if you let it lapse. If it was not assigned and they just required a copy then they will not even know if it lapses or you cancel it. It will be part of your mortgage conditions that you have cover in place but realistically all the bank do is contact you if they know you dont have it but this is driven more by an urge to sell you a policy themselves than out of any concern for you.

Marcusm

It's hardly inspiring that the lending institution can be so incompetent. Given the property Market in Ireland over the past 4 years, a sensible institution would have ensured that any security deemed necessary at the outset remained in place now that the principal security (the property) is worth substantially less than at inception.

phormium

To be fair the number of cases where someone would die and their life cover had lapsed would be far and few between, having said that there might be a lot more lapsed cases these days and dependants unable to continue the mortgage if there was a death.