- 47% of Irish people surveyed said they felt that their bank put pressure on them to take out their mortgage protection policy with them.
- 74% of Irish mortgage holders have taken out mortgage protection with a bank.
- 57% of Irish mortgage holders were not told by their bank that they were perfectly entitled to shop around and buy their mortgage protection cover elsewhere e.g. with an independent broker.
- 69% of Irish people were not aware, when taking out their mortgage protection, that the banks are only connected to one life insurance company i.e. they do not cover the whole market.
- 55% of mortgage holders had been offered ‘additional benefits’ by their bank even if they had demonstrated no interest in any other bank offering apart from mortgage protection.
- 89% of Irish people said they would switch their mortgage protection cover to another provider if it were cheaper, gave sizable savings and ensured no dilution in cover.
Almost half of all mortgage holders felt that they were pressurised into taking out mortgage protection with their banks, and many of them were not informed of other options available to them by their mortgage lenders at the time of taking out their mortgage.
Figures compiled by online financial services company Low.ie through an iReach Nationwide Survey which focused on mortgage holders in Ireland reveal that 57% of mortgage holders were not made aware of the fact that they could take out a mortgage protection policy with an independent financial broker instead of their bank. This means that they ran the risk of being charged a higher premium than those that could be obtained out in the wider market.
74% of mortgage holders surveyed stated that they took out their mortgage protection with a bank which is a very high proportion of people who deal with their bank for mortgage protection, particularly when those banks do not give the consumer proper choice as they do not cover the whole market.
Aside from Bank of Ireland, all banks in Ireland only deal with Irish Life for their mortgage protection, while Bank of Ireland solely use their wholly owned subsidiary, New Ireland. 69% of people said that, at the time of taking out their mortgage protection with a bank, they were unaware that their bank was connected to just one life insurance company and that this dictated the mortgage protection policies that they were being offered.
This indicates that the majority of bank mortgage customers are missing out on the very good value and better types of mortgage protection products that are available in the wider market through independent financial brokers.
For example, Irish Life do not offer Dual Life Mortgage Protection Cover and have a minimum premium of €13 per month. This compares to other life companies like Zurich Life and Royal London who have minimum monthly premiums of €10 with the former also offering Waiver of Premium benefit at no extra cost and the latter also offering Dual Life Mortgage Protection cover at no extra cost.
Of course, people with mortgage protection can switch their cover to another provider at any time if they find that they can avail of a better deal elsewhere, and 88% of respondents said that they would do so if it were cheaper, gave them sizable savings and ensured no dilution in cover.
Furthermore, 56% of respondents who took out mortgage protection with their bank said that they were offered additional benefits such as serious illness cover even if they had shown no interest nor requested any information on these additional benefits for their mortgage protection cover. Whilst banks may argue they are just doing their job well by providing this additional advice – it also happens to raise the cost of premiums significantly as well as generating sizable additional income for the banks.
Peter O’Reilly CEO of Low.ie, said;
“I find it disgraceful to see how much the banks are pulling the wool over people’s eyes, and the results of this survey clearly show us that the customer is not Number one in the banks eyes. Sadly, not only are Irish mortgage holders paying over the odds on their mortgage rates, but they are also doing likewise on their bank provided mortgage protection.”
“One would think that after their starring role in the recession, banks would strive to do right by their customers. When almost half of mortgage holders in Ireland state that they felt pressurised into taking out mortgage protection with the bank that issue them with their mortgage loan, it shows that little seems to have changed. Banks continue to focus more on their P& L rather than providing best advice to their customers.
“Some consumers are not shopping around out of inertia or choice but for many mortgage holders they are not even being given the option to shop around by their banks when they take out mortgage protection. For 57% of people not to be made aware of the fact that they can take out mortgage protection with an independent financial broker only serves the interest of the bank and does not offer the customer a competitive option.
“Many people will automatically take out a mortgage protection policy with the bank where they have received their mortgage loan as they feel almost grateful to have been given a mortgage. They are under absolutely no obligation to do this and they should not be rushed into signing up for mortgage protection as not only is it not competitively priced, but they are also being limited to just one life insurance company. Anyone who is taking out a mortgage loan should shop around to find the best deals from independent financial brokers like Low.ie who analyse the whole market. For many first-time buyers who are new to the property market it can be quite an overwhelming experience when agreeing mortgage terms, and many of them are very quick to sign on for mortgage protection with their banks which could end up costing them thousands of euro extra in the long run.”
Mortgage protection insurance is a life insurance policy that pays off your mortgage if you or your partner die during the term of the mortgage. It runs for the same length of time as your mortgage. So, if you take out a mortgage over 20 years, your mortgage protection insurance must also be in place for 20 years. If you die during the term, your insurance company pays the policy benefit directly to your mortgage lender. Your lender uses the amount needed to pay off the mortgage and, if there is any left over, they will pass it to your estate. You can change insurer during the term of your mortgage if you find better value elsewhere.
Dual Life Mortgage Protection Cover – Unlike joint life mortgage protection which pays out on the first death only – dual life mortgage protection pays out on both deaths. It pays off the mortgage on the first death and then continues to provide life assurance on the remaining life paying out a lump sum for one’s dependants if the second life passes.
Waiver of Premium Benefit – This benefit provides for the payment of mortgage protection premiums by Zurich Life if a client is unable to work because of accident or illness.
For more information visit www.low.ie
For more information on Low.ie or to arrange an interview with Peter O’Reilly, CEO of Low.ie, or Sharon Doyle, Chief Operations Officer at Low.ie, please contact either Aileen O’Brien or Patrick Ward at O’Brien PR on 045 407017 or 0868403624.
Low are one of Ireland’s leading online brokers for mortgage protection and life insurance with over €2 billion in cover written and over 8,000 customers since their launch in 2014. The success of Low.ie is built on their ability to cover the whole market, find the lowest quote from all the life companies and beat it – all backed up by the personal touch of a very experienced team of friendly financial advisors. Low were also the first online broker to introduce a pledge to beat any comparable quotes and to date they have saved their customers over €7 million. These savings are against the lowest prevailing life company quote.
All their advisers are qualified financial advisers and they provide a first-class service, best illustrated by the 5 star rating and mark of 9.6 out of 10 they get on global independent review site Trustpilot ( https://ie.trustpilot.com/review/www.low.ie ) .
Peter O’Reilly – Managing Director Low.ie
Peter has over 32 years experience in financial services including senior roles in UBIM, Standard Life and NCB Stockbrokers. He oversees the whole business be it liaising with all the life companies or working on a number of business development initiatives. Peter is a Qualified Financial Adviser and has a Masters of Business Studies Degree from UCD.
Sharon Doyle – Operations Director Low.ie
Sharon has over 19 years experience in the financial industry and is an APA. Sharon held a number of senior roles in Campion Insurance prior to joining Low.ie. Sharon keeps the show firmly on the road in Low from managing our team of financial advisers to dealing with our IT providers.