Financial regulator warns housebuyers to shop around for life assurance

HOUSEBUYERS who take out life assurance from their mortgage provider could be missing out on thousands of euro if they fail to check for better deals elsewhere, the financial regulator warned yesterday.

The Irish Financial Services Regulatory Authority (IFSRA) said its latest survey of the life insurance market showed typical consumers could save over €1,000 over a policy’s lifetime, if they shop around.

IFSRA consumer affairs director Mary O’Dea said many consumers only thought about life insurance for the first time when they took out their first mortgage. “When you take out a mortgage, you must have mortgage protection insurance in place, which is a life insurance product that pays off your mortgage if you die during the term,” said Ms O’Dea.

“However, you are not obliged to buy mortgage protection from your mortgage lender or broker, so compare what other providers are offering. Whether you have existing mortgage protection or are looking for your first mortgage, look around to see if you can get a better deal elsewhere.”

The survey showed smokers paid considerably more than non-smokers, with monthly premiums twice as expensive in some cases. A 26-year-old male smoker will pay an average of €1,500 more than a non-smoker for cover of €250,000 over 20 years.

IFSRA also said savings were open to anyone with a mortgage, not just first-time buyers. A couple aged 54 or 55 could save around €1,300 on a 10-year policy giving them life cover if they remortgage. Consumers with life or mortgage protection are free to switch providers at any stage during a policy.

“Life insurance is a long-term financial product, so think about your life insurance needs if your partner or children rely on your income,” said Ms O’Dea.

“If you have mortgage protection, this will clear your outstanding mortgage if you die, but will not meet your family’s other financial needs. With life insurance, your dependents will get a lump sum payment if you die within the term. This survey and our life insurance guide can help you to make sure that you have the necessary cover in place.”