You’ve been mortgage approved after years of saving, form filling and hoping. You’ve trawled the property sites and now you’ve found a house that suits and your offer has been accepted.
Joy! Bliss! The day you get the keys is within sight. Just a few more boxes to tick…
One of those compulsory boxes when buying a home in Ireland is getting mortgage protection insurance.
This type of insurance pays off your mortgage if you die during the term of the loan. Insurers want to know that you’re not going to die prematurely before the mortgage is paid off so they carefully assess your risk.
While getting this insurance is generally straightforward and inexpensive, you can run into problems – and serious delays – if you have a pre-existing health condition. The good news is that 90% of applicants get accepted straight away.
Of the main insurers in Ireland – Aviva, Irish Life, New Ireland, Royal London and Zurich – Aviva decline only 2.5% of applications and Royal London decline less than 2%, according to brokers, Low.ie.
The other good news is that some insurance companies are more sympathetic to some health conditions than others.
That’s why it’s important to do your research. One could load massively for one illness but not for another. Often, brokers will be aware of these sympathies and know who to approach on your behalf based on your medical condition.
Conditions that are tricky for cover
Other factors
Smoking: you may pay double because of statistical evidence that smokers die younger and get more illnesses than non-smokers.
Family history: If you have a family history of cancer or a hereditary condition like cardiomyopathy it’s a good idea to use a specialist broker as they will point you in the direction of insurers who are more sympathetic.
Doctor's role
In researching this article, Irish Country Living asked a doctors’ representative organisation about the issue of medical form-filling for patients.
Did doing this put them in difficult situations at times? Did they feel pressured by patients to not tell the whole truth, perhaps, knowing how much their patient wanted/needed to buy a home? Do patients see their reports?
Anecdotal evidence suggests that this aspect of GP work is difficult at times. However, when contacted, the Irish College of General Practitioners (ICGP) referred us to the Irish Medical Organisation (IMO). The IMO declined to comment.
Colin White, national advocacy and projects manager in the Irish Kidney Association, says: “Getting life cover as part of the mortgage application process is a very real challenge for people living with end stage kidney disease.
“Rather than looking at it as being solely an issue with the insurers, consideration needs to be given to why life cover is mandatory as part of the mortgage process – the lender has title to the property until the mortgage is repaid. Life cover is not mandatory in the UK.”
Karina Toolan, communications officer in the Irish Cancer Society, adds: “We regularly hear from people who have been refused cover or are having difficulty obtaining it.
“Today, approximately 200,000 people in Ireland are living beyond a cancer diagnosis. Now, three in five people and four in five children diagnosed with cancer are alive five years after their diagnosis. While this is great news, many Irish people diagnosed with cancer find themselves facing financial penalties years after the completion of their treatment.”
In April 2023, Insurance Ireland, following discussions with the Irish Cancer Society, announced its intention to launch a Code of Practice.
Under the Code, a cancer diagnosis will not be taken into consideration for mortgage protection insurance seven years after active treatment has finished (five years for a person diagnosed under age 18). Legislation is needed, however.
Diabetes patients
“Over the years we have had many enquiries to our helpline from people with diabetes experiencing difficulty accessing mortgage protection,” says Gillian Reynolds, operations coordinator in the Irish Diabetes Association.
“In most cases, the issue arises on the day of completion or in the immediate days leading up to it.
“We have worked for many years with an insurance broker who provides advice and assistance to those with diabetes who are experiencing difficulty and usually there is a positive outcome for the individuals.
“However, costs are higher. When quoted, people with Type 1 diabetes can expect to pay 200-450% more on their mortgage protection cover, depending on their diabetes management, while those with Type 2 diabetes can expect to pay 50-200% more,” Gillian points out.
“Policy changes are needed to support a scheme whereby people with diabetes will be able to secure a mortgage after being denied by three insurers.
“This would be a game-changer,“ she says.
derail the sale’
John (42)* spoke to Irish Country Living anonymously about his experience.
“Last November, my wife Karen and I finally found a house to buy in the midlands after being ‘gazumped’ three times. We were delighted when our offer was accepted immediately and as we were mortgage-approved, we thought we would have the keys by 1 March.
“However, in February, the whole process was nearly derailed.
“We had signed the contract and thought that getting mortgage protection insurance would just be a formality. However, I was sick a few years ago with kidney function issues and even though my condition has been monitored and treated since then, insurers were perceiving it as serious because protein levels in my urine were above a certain limit. We were using a broker and the ‘no’ calls and emails kept coming.
“Three weeks of absolute stress followed. There was the fear that we’d lose the sale; that we were also letting down the vendors who had their own plans made. There would also be financial implications for us if the sale collapsed.
“I was feeling guilty that my condition could derail the sale while Karen was feeling helpless to sort out the problem. We hardly slept as we tic-tac’d back and forward with the broker and solicitor and the bank.
"We were also told that if we had three refusals the bank could waive the need for cover but there was no guarantee this would happen. It would depend on the bank.
“In the end, we were told that one company was prepared to take us on. Karen would pay €22 per month but I had to pay €110, nearly five times as much for cover, but the relief that day was monumental.
“The learning from this? We should have sussed out getting mortgage protection cover well beforehand but we honestly didn’t know how serious the insurance companies regarded my condition."
*Name with editor
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