Mortgage Protection & Life Insurance

Saint Sonner

I am currently in the process of finalising a mortgage with BOI.

They have rang me and told me that in order to be able to draw down when the time comes we need to come in to the bank and take out mortgage protection and life insurance.

Is this correct – I assume it is.

Also whats involved in the process and can I go elsewhere and am I likely to get value?

Flatzie_poo

Saint Sonner wrote: »

I am currently in the process of finalising a mortgage with BOI.

They have rang me and told me that in order to be able to draw down when the time comes we need to come in to the bank and take out mortgage protection and life insurance.

Is this correct – I assume it is.

Also whats involved in the process and can I go elsewhere and am I likely to get value?

Yep, you need to have 2 covers in place - Home insurance and life assurance.

However, you can choose from wherever you want to get those covers - i.e. not just with BOI. Shop around, some great deals out there if you do the leg work.

Bear in mind that you want your cover effective the day before drawdown date, so the bank can wire monies to be in the vendor's solicitor account first thing.

Not having it in place the day before, held up my drawdown by a weekend....

The process if getting the covers is a lot of questions and possibly a letter to your GP.

The drawdown process itself will be explained in detail to you by your solicitor.

sbsquarepants

You'll need insurance but not necessarily theirs - you can almost certainly get the exact same thing for less if you shop around a bit.

spaceHopper

There are two kinds of insurance here both sometimes called mortgage protection.

Mortgage payment protection kicks in if you lose your job or are sick...and it will pay the mortgage payments after a cretin period, might be that month or upto six months after losing your job. There are exclusions basically if you are full time PAYE you'd be fine but if you are self employed a lot won't cover your. That is where some banks were caught for miss selling it to people. Banks make a good bit of money on these but you are under no obligation to take it out. I didn't as I think its a con.

Then there is a life insurance policy that will pay out if you die to cover the mortgage. There are several different types of this but you must have it how ever you don't have to take it from the bank you can get your own but they will need proof.

You also need home insurance in case the house burns down....

Was this stuff not discussed with you before op?

I've only had my very first initial chat with KBC about mortgages and was given all the info about the protections that need to be put in place and even got quotes.

I was quoted for loads of stuff like income protection, specific illness cover and mortgage protection. I was told the only thing that's compulsory is mortgage protection that covers your mortgage in the event of death and it was fairly cheap too. There was no mention of needing a separate life insurance and mortgage protection.

CageWager

Best thing to do is find a reputable independent insurance broker - and I stress independent because some brokers are "tied agents" and only sell one companies products (eg, aviva, irish life etc.) They will take you through the options and shop around on your behalf so finding a good one can really save you money!

L1011

BOIs in-house brokers are painfully expensive and they do (illegally) imply that using them makes it more likely to get mortgage approval.

Went from 25.23 a month to 9.60 a month for the mortgage protection and took ~200 a year off the house insurance after year one.

jay0109

Get this sorted well in advance of the expected close date as last minute complications can arise, especially for the Assurance. Medical issues can slow things down.

Millem

Mortgage protection is cheaper than life assurance as the amount paid out decreases with your mortgage.

You need to have one before you sign your contracts in case God for bid something happened to you or you got refused cover you are legally obliged to go through with the sale after contracts are signed and exchanged.

We have both but for different amounts. We took our life assurance out when just before I was pregnant (2 years before buying our house).

You also need house insurance before you sign, in case any damage happens to house as again you legally have to go through with the sale after contracts exchanged. My engagement ring was added to the policy for free. My neighbour was broken in last year and insurance cOmpany looked for photos of her rings! My house insurance is with fbd.

I don't know if an ordinary mortgage protection still pay out if you get sick or lose your job? We took ours out last year and only came across ones that paid out on death. A broker told me they stopped doing them but when we took out our life assurance you could get critical illness etc added to it.
I did take out income protection though with cornmarket, again it's not required but they cut our sick leave in work

L1011

Millem wrote: »

I don't know if an ordinary mortgage protection still pay out if you get sick or lose your job?

They never did - serious illness cover and payment protection have always been separate products. They are often available with one premium but that's it.

Saint Sonner

I went onto Chill insurance last night and for some quotes. I wasn't sure about some of the questions can anyone give guidance.
Bearing in mind I intend to buy this house to possibly live in for 12-24 months then move back to the occupied six where I assume a southern policy wont cover me for property owned there? If this is the case I would only want the bare minimum in the hope that nothing major changes in that time frame.

Life Insurance:
Sum Assured?
Term?
Take Serious illness or not?

Mortgage Protection:
Sum Assured?
Term?
Take Serious illness or not?

Saint Sonner

Saint Sonner wrote: »

I went onto Chill insurance last night and for some quotes. I wasn't sure about some of the questions can anyone give guidance.
Bearing in mind I intend to buy this house to possibly live in for 12-24 months then move back to the occupied six where I assume a southern policy wont cover me for property owned there? If this is the case I would only want the bare minimum in the hope that nothing major changes in that time frame.

Life Insurance:
Sum Assured?
Term?
Take Serious illness or not?

Mortgage Protection:
Sum Assured?
Term?
Take Serious illness or not?

As I said above I was told that the minimum was mortgage protection (without serious illness protection). You don't need both life insurance and mortgage protection as far as I know and you don't have to get the serious illness cover. I specifically asked for a quote for the bare minimum cover required.

Saint Sonner

Thanks for that I will say this to the bank when I meet with them