You may think that insurers are greedy so and sos who are always happy to take your money.
However, in real life, they can and do turn people down, unfortunately.
Sometimes they outright decline but other times they postpone (basically a ‘try again later’).
This article was inspired by an email from Annie, who wrote:
Hi. My Life Insurance has been postponed, and I need it for a mortgage and am wondering if there is any type of Life Insurance out there that I can get?
Obviously, for Annie, this is a pain in the ass.
She’s done the hard part, saved the deposit, and found a house to buy.
However, to buy a home in Ireland, you have to get Mortgage Protection, which pays off your debt to the bank if you die.
In Ireland we love the banks, and give the little darlings as much protection as possible. That’s why they get to keep get the deeds of your house AND you pay for a life insurance policy that will clear the mortgage.
Anyway, rant over.
Let’s see how Annie is getting on.
She can’t actually buy the house until she gets Mortgage Protection, so you can see why she’s in a pickle.
In Annie’s case, her postponement isn’t a hard no – it’s because something made the insurer pause and decide that her current risk is too high, so they may ask her to change some things or do some things and then reapply.
There may be several reasons the insurer postponed her application:
Annie might have been recently diagnosed with a health issue which means she’s too “high-risk” for the insurer right now – they would prefer to wait for six month to see how she responds to treatment.
Remember: insurers don’t want you to die (not out of love for you, but because it will cost them money)
They want you to continue to pay your premiums, and outlive your policy so they can scoop up all your money without having to pay a claim.
Or Annie may have upcoming tests/scans/smear test results/new medication/something medical that the insurer wants to check on.
Only after a certain amount of time has passed or once the tests have taken place, will the insurer will give a ‘yes’ or ‘no’.
All of the insurers ask the following question on their application form:
Are you awaiting the results of any tests/investigations or referral to any hospital, clinic or doctor?
Answer yes to this question and the insurer is likely to postpone your application for mortgage protection until the test or investigation that you have been referred for is complete.
If you’re due to close on a mortgage soon and you have been postponed, it must have come as a terrible shock.
I’m sorry the timing is so bad 😌
Every day we take calls from people in the same situation and unfortunately there is not much we can do.
You see it’s not the insurers being arsey or difficult.
They are led by your medical professional.
So if your doctor or consultant, due to an abundance of caution, refers you for a scan on something harmless like a nasal polyp, the insurer will also be abundantly cautious and postpone offering cover until they can review the scan results.
The insurer may overlook the referral if your GP is happy to sign off that you no longer need it.
However, a GP will rarely sign off unless you have been on the public waiting list forever and they feel it’s no longer required.
Apart from that situation, in all other cases, the insurers will postpone offering cover until the test results are available and have been reviewed by your specialist.
I know that might mean going private and paying through the nose but there is no other way.
If your GP believes a test is necessary, the insurer is going to agree.
Just a note here to avoid confusion: we’re using the term Life Insurance and Mortgage Protection interchangeably.
Mortgage Protection is a type of Life Insurance.
If you’re trying to get Life Insurance to protect your family, and you’re postponed, it’s not the end of the world if there is a 6-month delay in getting cover.
However, if you’re getting a mortgage, you’re under pressure because you may lose the house without mortgage protection!
First, you should find out why you were postponed for Life Insurance.
Ask the insurer to write to your GP with their reasons why letter.
Once the GP receives the letter, have a chat with them to see how they feel.
Usually, you can tell by their reaction whether it’s worth appealing.
Your options if postponed:
In the case of Mortgage Protection, you won’t be able to drawdown your mortggae unless you have mortgage protection or the bank agrees to a mortgage protection waiver.
(BTW, If you have any medical issues, apply for Mortgage Protection BEFORE handing over a non-refundable deposit. Everyone thinks they are in perfect health until they start filling in a mortgage protection application form.
Each insurer underwrites health issues differently.
Every insurance company has an underwriting department that do the maths and consider the risk on each application.
Some insurers treat specific illnesses or medical issues more sympathetically than others.
Just because one says no due to an upcoming test, another may say yes.
Just be prepared to pay a little more to get cover now rather than waiting.
It’s all a bit like Tinder for insurance.
The more insurers you apply to, the more likely you are to get a match.
Swiping right on all those insurers and their different policies takes a whole lotta time so consider working with a broker who will do the heavy lifting for you.
If you have a medical issue, be sure to work with a broker who has ample experience in that field. And make sure they deal with all the insurers.
That was a shameless plug for our services just in case it went over your head.
Also, make sure you know the ins and outs of your medical condition, even better if you can share medical reports.
The more information you have for your broker (👋) the better.
They’ll use their nous to present your case to the most sympathetic insurer to increase your chances of nabbing mortgage protection and buying your dream home.
That’s a firm no.
The insurer will only explain their decision to your GP because your GP can decipher the medical reasoning behind for the insurer’s decision.
The insurer won’t discuss their decision with you.
And they won’t discuss their reasons with us either, it’s all very hush hush.
As above, if an insurer has postponed or refused your application, ask them to send their reasons for doing so to your GP.
If you can’t get cover, and you can prove this by showing the bank your postponement/decline letter, the bank may allow a waiver.
A waiver is a piece of paper you sign confirming you understand the consequence of getting a mortgage without life insurance.
i.e. if you die, your partner will be liable for the full amount.
The bank will grant a waiver based on the commercial merits of your case.
Let’s say one of you can’t get cover but have life insurance though work – this will give the bank some comfort.
Likewise, if the person who can get cover is the main earner, this will increase your chances of getting a waiver.
From Citizens Information
Exceptions to the legal requirement
You do not have to take out mortgage protection insurance if:
However, AND THIS IS THE KICKER, some lenders may insist that you take out mortgage protection insurance, even if you satisfy one of these conditions.
At the end of the day, waivers are at the discretion of the lender.
Most postponements will be because of medical issues.
Undoubtedly, this is a bit shit.
You’re the exact person who needs Life Insurance, not yer man up the road who is 33 and runs marathons before breakfast.
Of course, Runner Man is just as likely to be hit by a bus and wiped out – but you get my point. The insurers are awful sneaks when it comes to illnesses and pre-existing conditions.
The extent to which your health will affect your insurance comes down to the following:
If it’s a mild condition, you’ll probably be grand.
If it’s moderate, you’ll have to pay more.
If it’s a severe case (all the bad stuff no one wants to think about), the insurer may refuse to offer cover, or you’ll have to trade-off with a seeeeeeriouus premium increase.
Your GP will have to complete a PMAR (Private Medical Attendants Report) – which is a medical questionnaire asking things like:
From there, you can see how an insurer would reassess your case.
If you are trying to apply for Mortgage Protection and you’re hit with a postponement, it doesn’t mean you definitely won’t get the house you’ve fallen in love with.
Or at least the home that’s not entirely falling apart based on the catastrophic housing situation in Ireland right now. Still, I’d be lying if I said it wouldn’t affect your chances.
Your best bet is to follow the steps I outlined above and see how it works.
You’ll have to roll the dice again down the line if all else fails.
There will be other houses, and probably a better one.
I promise it’s not all doom and gloom!
More than likely, no, unless the appointment is for something trivial.
The most common reasons for a postponement are:
Annie isn’t alone. And neither are you.
We’ve helped many people get cover where an insurer had previously postponed.
I’m not saying it’s easy, but it is possible.
If you don’t have a friendly face to help you navigate the maze of mortgage protection, you do now!
Call me on to discuss your application in confidence or schedule a call back here.
Don’t worry: we deal with difficult Life Insurance cases every day, so we know what we’re talking about. Just take a look at our testimonials.
We can do that for YOU too.
If an insurer has postponed you, please complete this short medical questionnaire, and I’ll be right back to discuss your options.
Chat soon,
Nick
lion.ie | Protection Broker of the Year 🏆
Editor’s note: This blog was first published in 2016 and we have regularly updated it since.
As Ireland's leading life insurance broker, we specialise in comparing the rates and policies from the top five Irish life insurance providers and offering the very best value quotes to suit the individual needs of our clients. Our expertise lies in finding a suitable insurance plan for those with specific needs, be it a particular illness, occupation or claim history, we've got you covered in every sense!
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