Renew Life Insurance

masterboy123

Hello All,

We are with Irish Life for our Life Insurance. It was required as part of our Mortgage approval.

We are paying under 20 bucks a month and wondering if the policy has to be renewed every year and so they send renewal notice?

Thanks

phormium

No it isn't renewed annually, you will have taken it out for a set term on it to match the mortgage term.

masterboy123

The mortgage is for 3 years fixed. So does it mean the life insurance policy is for 3 years?

phormium wrote: »

No it isn't renewed annually, you will have taken it out for a set term on it to match the mortgage term.

athlone573

NO

Its a 20 year policy or however long your mortgage is for

Your broker should of explained this to you.

If you want to really annoy people and possibly save a euro or two and have lots of time on your hands you could shop around for a cheaper policy if you want

phormium

It's a legal requirement that the mortgage protection term matches the term of the mortgage, the term of the mortgage is the number of years you applied for and accepted in your loan offer. The 3 yr fixed is merely a part of the overall term of the mortgage.

masterboy123

That's clear now.

We were not informed that it's for the whole duration and I assumed its like a car insurance that needs renewal every year. As we may develop health conditions and it could increase the premium.

And could I clarify if the house insurance (content + building) is also for the whole duration of mortgage?

Spocker

masterboy123 wrote: »

That's clear now.

We were not informed that it's for the whole duration and I assumed its like a car insurance that needs renewal every year. As we may develop health conditions and it could increase the premium.

And could I clarify if the house insurance (content + building) is also for the whole duration of mortgage?

This will be documented in the General Conditions section of your mortgage pack, you are required to have both life and house insurance in place for the duration of the mortgage.

BronsonTB

masterboy123 wrote: »

And could I clarify if the house insurance (content + building) is also for the whole duration of mortgage?

House Ins is like car ins, you can shop around each year for the best premium.


Life cover is different & you pay the premium for the life of the mortgage to be covered (Based on current health status not future health status)

Only need to get a new life policy IF you change mortgage, then health is reassessed at that point in time.

Trish56

Your home insurance is renewable annually and you should receive renewal papers about two months before renewal.

Also the Life Insurance Company would have sent you a copy of your Life Insurance policy which clearly shows the amount of life cover the term and the monthly premium.

Henry Ford III

I'd be surprised if it's a 3 year term. Bet it's 9 or more.

Please consult your policy docs OP and confirm.

Buddy Bubs

masterboy123 wrote: »

That's clear now.

We were not informed that it's for the whole duration and I assumed its like a car insurance that needs renewal every year. As we may develop health conditions and it could increase the premium.

And could I clarify if the house insurance (content + building) is also for the whole duration of mortgage?

Your mortgage protection life cover will be for the duration of the mortgage. It will decrease over time to match outstanding mortgage. So you'll more than likely not have any access to cash from it in the event of a claim.

House insurance is renewed annually

athlone573

Buddy Bubs wrote: »

Your mortgage protection life cover will be for the duration of the mortgage. It will decrease over time to match outstanding mortgage. So you'll more than likely not have any access to cash from it in the event of a claim.

House insurance is renewed annually

To digress somewhat,
Some companies sell multi year home insurance policies (up to three years) which can be good value.

Henry Ford III

Henry Ford III wrote: »

I'd be surprised if it's a 3 year term. Bet it's 9 or more.

Please consult your policy docs OP and confirm.

The fixed term period on his mortgage is 3 years, the actual length of the mortgage term is much longer I suspect.

phormium

Buddy Bubs wrote: »

Your mortgage protection life cover will be for the duration of the mortgage. It will decrease over time to match outstanding mortgage. So you'll more than likely not have any access to cash from it in the event of a claim.

House insurance is renewed annually

Just for clarity the amount being paid out in the event of a claim will decrease to match the outstanding mortgage, the premium stays the same over the full term normally.

OP it would have been on the application form you completed the term you applied for, it would have been in the docs you received re the insurance policy, they probably did tell you too but people don't often 'hear' all the stuff when they are getting a mortgage as the focus is on getting a house and the mortgage and ancillary stuff is just the necessary essentials to getting the house. Nobody gets up in the morning and things hey I'll get a mortgage, they want a house so the other stuff is just a necessary evil!

Henry Ford III

Jeremy Beagle wrote: »

The fixed term period on his mortgage is 3 years, the actual length of the mortgage term is much longer I suspect.

You insure for the entire term of the mortgage at the outset though.

masterboy123

That's correct.

Mortgage is for over two decades.

Thanks everyone!!

[Deleted User] wrote: »

The fixed term period on his mortgage is 3 years, the actual length of the mortgage term is much longer I suspect.

Henry Ford III

Henry Ford III wrote: »

You insure for the entire term of the mortgage at the outset though.

Indeed, OP wasn't aware of that though. Must not have had as good a broker as you!

The J Stands for Jay

Buddy Bubs wrote: »

So you'll more than likely not have any access to cash from it in the event of a claim.

As well as because you'll be dead, this is because the amount paid out is expected to reduce at the same rate as the mortgage balance, assuming the interest rate stays within the band selected in the application form. This make it cheaper than a term assurance policy, as when the risk of dying increases with your age, the amount to be paid out is decreasing.

athlone573

McGaggs wrote: »

As well as because you'll be dead, this is because the amount paid out is expected to reduce at the same rate as the mortgage balance, assuming the interest rate stays within the band selected in the application form. This make it cheaper than a term assurance policy, as when the risk of dying increases with your age, the amount to be paid out is decreasing.

We don't know whether the OP has a level term policy or a "mortgage protection" policy. Often there's not much in the difference pricewise.

The policy would usually pay out on the first death so it would be possible (and sad of course) to claim on your own policy.