When Should You Apply for and Start Your Mortgage Protection Policy?
When Should You Apply for Mortgage Protection?
You should apply for mortgage protection as soon as you go sale agreed.
You should issue your mortgage protection policy before you sign binding contracts.
This is the only way to avoid the heartache of not being able to buy your home due to an unexpected health issue.
How Long Does It Take To Get Mortgage Protection
How long it takes to arrange mortgage protection depends on several factors:
Your Health
How much cover do you need and your age
How efficient your GP is
Let’s look at your health first:
You’re fit as a butcher’s dog, hallelujah – glad to hear it; you’ll have no issue getting cover quickly, assuming you don’t fall foul of the cover/age pitfall that I discuss below.
Let’s say you apply for mortgage protection today; we’ll have your policy within a couple of days – sooner if you REALLY need it!
However, if you have any health issue that may require a medical report from your GP, you’re looking at anywhere between 4-6 weeks to get cover, so if your mortgage drawdown is in the next couple of months, you should get cracking asap.
Why the amount of cover you need comibined with your age can delay mortgage protection:
Insurers have these fancy yokes called “non-medical limits”.
In plain English, this means the older you are, the less cover you can get without the insurers needing additional medical information.
For examples, if you’re 45 and have no health issues, you can get covered for €600,000 Mortgage Protection based on an application form alone.
However, if you’re 47, and need the same amount of cover, the insurers will ask you to go for a nurse’s medical screening.
Fortunately, all the insurers have different non-medical limits, so just because Irish Life has requested a nurse medical, we might be able to get you cover based on an application form only with a different insurer.
So, if you’re 40+ and need substantial cover, make sure to shop around if you want to avoid a nurse prodding and poking you.
How quickly does your GP send back medical reports:
As above, on average, we are finding it is taking 4-6 weeks for a GP to send back your PMAR (Private Medical Attendants Report).
That’s fair enough; we’re all busy.
Fortunately, some GPs are saints, and if your GP is sporting a halo, they could send it back within days.
However, with some GPs, your future will look like this:
Day 1 – the insurer requests the PMA by post
Day 5 – you follow up with the GP; the GP says the insurer never sent it
Day 6 – the insurer sends the PMA by post and fax
Day 9 – you finally get through to your GP, who confirms receipt
Day 13 – the GP requests prepayment from the insurer before they will complete the PMAR
Day 20 – prepayment made
Day 27 – you chase the GP
Day 36 – GP sends back the report to the insurer
Day 40 – after reviewing the incomplete report, the insurer has to write back to the GP for further information
Day 44 – GP says they never received this request
Day 47 – Insurer sends the request by fax and post
Day 60 – GP writes back to the insurer
Day 61 – insurer has all the required information and makes a decision
You might think I’m exaggerating, but this is a common timeline, especially for busy surgeries.
If your GP requests prepayment before completing the PMAR, then prepare yourself for a long wait.
When Should You Start Your Mortgage Protection Policy?
So, let’s say you’ve gone through the underwriting process, and the insurer has offered you cover.
What next?
You can either start your policy immediately or ask us to hold your policy until you have a start date.
1) Start your mortgage protection policy immediately.
In this case, the insurer will issue your policy documents immediately.
You are covered from this date and will receive your policy documents.
If you die before you assign this policy to your lender for your mortgage, the insurer will pay the proceeds to your estate.
2) Hold for your start date (also known as Hold for Risk Commencement Date)
Here, we hold off starting your policy until you have agreed on a mortgage drawdown date.
Your bank will give you the drawdown date.
This approach is dangerous.
Why?
You must disclose any new health issue that may arise between the date the insurer accepts you for cover and the date you start the policy.
Also, you won’t get your policy documents until you ask us to issue/start your mortgage protection policy (see above)
e.g
The insurer accepts your application for mortgage protection on the 9th of July, but you’re not due to draw down your mortgage until the 29th of August so you decide to hold off starting your policy.
In the meantime, you visit your GP on the 25th of July and are referred for a scan.
You must notify the insurer about this scan; unfortunately, they will revoke their offer of cover until the scan has taken place.
That’s why we recommend starting your policy in advance – to avoid any unforeseen medical issues screwing things up at the last minute for your peace of mind!
If starting your policy early, you should add one year to your policy and a bit extra to the cover.
Why?
As soon as you issue your policy, the term and cover will start to reduce.
You don’t want your policy to be two months short if your drawdown is delayed.
If it is, the bank will insist on a new policy matching the terms on your mortgage loan offer.
This is the last thing you want when you’re about to close.
Related Topics:
What if you can’t get mortgage protection?
Do you always need life insurance for a mortgage?
Get an instant mortgage protection quote.
Next Steps
If you’re due to drawdown on your mortgage in the not-too-distant future and would like to sort out your cover in advance, I’d love to help.
Please complete this financial questionnaire, and I can recommend the best insurer for you.
Alternatively, you can schedule a callback here if you’d prefer a chinwag first.
Talk soon!
Nick
