Changing Your Mortgage Protection – Is It Worth It?

Can changing my Mortgage Protection really make a saving?

It can. When the newspapers advise you to make a switch, they mention savings of €2,000 to €7,000 over the life of the policy. Obviously, these are averaged figures, with some people saving a little, and others a lot.

But I’m older, won’t that make a difference?

Age DOES cause the standard quote to increase, BUT, if your remaining mortgage amount and term have both decreased, this can still reduce the quote you’ll be offered by the insurers.

As an example, a new quote for a couple, both 30, non-smoking, for €300,000 for 35 years, is between €25 and €28 per month.

By contrast, a 50 yr old couple, looking for cover on €100,000 for 10 years, are quoted between €21.50 and €26 per month.

As older policies can sometimes be more complicated than modern mortgage protection policies, not only could you be paying for extras you don’t require, you could make an even greater saving by switching.

I’ve had some health issues though, won’t that make it very expensive?

It’s true that insurance companies will take details of your current health, and may apply a loading. This loading will be an increase of 50%, to 175% in rare cases, on your quoted monthly premium.

In a recent case for Greenway Financial Advisors, a couple in their 60s were quoting for €60,000, for 5 years. They had both experienced recent health issues, in the past 5 years, but the quote they received was substantially lower, so they decided to proceed with the application.

What happens next?

I made them aware that the quoted price was unlikely to be the final offer made by the insurer, and took their details. Both of my clients required a PMAR (Private Medical Attendants Report) from their GPs, which the insurance company sent, and paid for.

When the reports were finally received, and evaluated by the insurance company underwriting teams, a loading of 50% was applied to each of my clients. This increased their quoted monthly premium from roughly €25 to €50, but still left my clients with a saving of just over €200 per year, or €1,000 over the remaining 5 years of their mortgage.

That seems complicated.

An application that requires more information, or a PMAR, does take more time, and more work. Importantly, this is work that your broker does on your behalf. I can make the calls to doctors to remind them, and check with underwriting teams to give you estimates of the loading before you even apply.

If you’re changing your mortgage protection, I’ll make sure you know not to cancel your existing policy until my work is done. You’ll be covered while this is happening. If you want to discuss your options for switching your policy, contact me today. In the meantime, try our quote calculators to see if your policy could be working harder for you and your pocket.

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