Can I cancel my mortgage life insurance?

Question

José Manuel Alburquerque · Accepted Answer

Yes, but with consequences that need weighing up. If the only purpose of the insurance was to lower the interest rate, you can cancel it at the renewal date by giving one month's notice. The bank will withdraw the discount. If the mortgage deed requires you to have it as security, you cannot go without insurance, but you can switch to a policy from another insurer with equivalent cover, which the bank must accept. If you have only just taken it out and it is an individual policy, you have 30 days from when you were given the policy to cancel it without giving any reason. If it only lowered the interest rate Check in the mortgage deed how much the rate goes up if you drop the insurance. Compare that increase with what you pay for the insurance each year. Give notice of cancellation in writing at least one month before the annual renewal date, to both the insurer and the bank. If it is compulsory Find another policy with the same cover and the same sum insured, with the bank as beneficiary for the outstanding debt. Submit it to the bank before the renewal date. The bank cannot reject it if it is equivalent, charge you for reviewing it or make the loan terms worse. The bank is obliged to accept it for mortgages signed on or after 16 June 2019 and for earlier ones that were later modified or moved to another bank. For an older mortgage, check first what the mortgage deed says. Before cancelling Think about what it protects. If you die, or become disabled and the policy covers this, the insurance pays off the outstanding debt and your family keeps the home. If you have health problems or are of a certain age, another insurer may not cover you on the same terms. Do not cancel the old policy until you have the new one signed and accepted by the bank. If you paid a single premium for several years, ask how much of it you will get back, because, except where the loan is paid off, this depends on the policy.