Mother with terminal cancer told arrears mean mortgage will not be paid off when she dies

A Kerry mother-of-two diagnosed with terminal cancer has been told that if she dies, her €110,000 mortgage won’t be paid off as she is €260 in arrears on her mortgage protection policy.

The woman from Tralee, who is in her 40s and does not want to be named, lost her job two years ago and fell behind in her AIB mortgage payments.

She managed initially to keep her mortgage protection policy payments up.

But 10 months ago as it got increasingly difficult to make ends meet, she defaulted on her €26 per month mortgage protection policy which she had taken out with Ark Life, an AIB subsidiary. She had been paying mortgage protection insurance for eight years before she defaulted.

When she contacted AIB to negotiate arrears and ensure that her two children, aged 19 and 21, would not be left homeless after her death, she was told that her mortgage would not be paid off when she died as she had broken the terms of her policy by defaulting.

The case was highlighted by Fine Gael’s MEP candidate in Ireland South, Deirdre Clune, who described the case as “deeply troubling”. “What efforts do the banks go to in ensuring that customers are made aware of the risks of falling into arrears on their insurance policy? Are the banks not under a duty of care to ensure that customers have sufficient insurance policies in place to cover the value of the mortgages? These are questions that need to be answered by the banks and the Central Bank,” she said.

An AIB spokeswoman said they could not comment on individual cases but that they had worked out a debt solution with the woman about her outstanding mortgage debt. The Central Bank said they could not comment either.


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