Age Restriction On A Mortgage Payment Protection Insurance Policy

[Bigfellah]

I have a mortgage which finishes next year. I took out Mortgage Payment Protection Insurance policy to run concurrently. It is designed to pay out a certain monthly amount for a maximum of 12 months should I be made redundant or fall ill and be not able to work - but only up to to age 65. I have been made redundant twice and the policy has paid out as described with no problem.

Now that the Age discrimonattion Act of 2006 is in force and the government is raising the "retirement" age beyond 65 in the case of men, it seems that the providers of Mortgage Payment Protection Insurance have not fallen into line and increased their age limit above which the policy will not pay out and this may result in many men (who will possibly work beyond their 65th birthday for whatever reason) losing out should they be made redundant or fall ill and be unable to work yet still have afew years to go on their mortgage.

Are there any folk out there who may be affected by this and if so have they taken any steps to have this remedied?

[Old_Geezer]

I suspect they would point out that the premium was calculated using the agreed 65 year limit, and that they would need to recalculate and request the unpaid excess if you wanted to extend it until you are older. Not that I know a great deal about the insurance industry.

[ubasses]

The thing here is that the terms of an insurance policy are laid down when the policy is taken out and signed and will be relevant to the term of the mortgage regardless of the age that it is due to be repaid. Just because the retirement age has increased does not mean exisisting policies will need to be altered. People taking out a Mortgage today which will not be repaid until after the age of 65 will be sold an appropriate policy to fit the mortgage.

[factor-fiction]

I agree with the others. The policy premiums were set based on the age being 65 and you were presumably happy with the terms of the policy when you took it out. You may be able to shop around for a new policy now which would pay out up to age 70 or 75.

[boxtops]

Yes - when I turned 65 (so it's not only applying to men), my MP cover ceased (and much to my surprise paid me a terminal bonus, which was nice). I haven't done anything about it to cover my remaining mortgage, but there are other insurance companies who do cover "the older person" - while I'm still working, I'd be paid in full for six months if I fell ill, so I'm hoping any illness wouldn't be longer than that. It's a gamble.

[bushbaby_de]

We recently took out a new mortgage and even though the retirement age is rising most of the mortgage companies will still only allow you a mortgage term that runs up to the age of 65, in which case the insurance policies don't need to change either!

[Bigfellah]

Thanks everyone. It seems the Insurance companies get you whichever way you turn - no change there.