Eagle Star tops mortgage protection survey

Eagle Star has emerged as the cheapest company for mortgage protection life assurance in a new survey by the financial regulator, which yesterday urged homebuyers to shop around for cover.

Eagle Star offered the lowest premiums for 11 of the 12 mortgage protection quotes requested by the Irish Financial Services Regulatory Authority (Ifsra).

It also gave the lowest premiums for seven of the 12 term life assurance quotes requested.

Irish Life was the most expensive company in six of the life assurance quotes, with Quinn Life emerging as the worst value for older applicants.

Canada Life and Friends First were among the most expensive companies for mortgage protection policies covering a loan of €250,000 over 20 years.

People aged 36 would pay over €1,000 more over the lifetime of the policy if they took out mortgage protection from the most expensive rather than the cheapest insurer, while the savings for male applicants aged 46 were more than €2,000.

Smokers pay considerably more for life assurance products, the survey confirmed.

Older applicants who smoke can pay more than double the premiums paid by non-smokers of the same age.

Age is also a key factor in the cost of life assurance, with the survey revealing a significant jump in the monthly premiums paid by someone who takes out a policy in their mid-40s compared to someone who applies for the insurance in their mid-30s.

For example, both male and female non-smoking homebuyers aged 26 could get mortgage protection cover for as little as €10 a month.

Men aged 36 could get cover for €18.23 a month, while women of the same age could get the same value policy for €13.29.

But if they were aged 46 by the time they applied for the cover - which is required by law for people under 50 when they take out their main mortgage - they would pay a minimum of €42.38 and €31.39 a month respectively.

The premium leaps for older applicants which makes it difficult for holders of expensive life assurance and mortgage protection policies to switch to the cheaper policies sold by rival insurers.

The financial regulator is imploring homebuyers to select their insurer carefully when they draw down their loan.

"You are not obliged to buy mortgage protection from your mortgage lender or broker, so compare what other providers are offering," said consumer director Mary O'Dea.

Further details of the survey, including a guide to life insurance, are available from the regulator's consumer helpline on lo-call 1890 777 777, at www.itsyourmoney.ie and at its consumer information centre at College Green, Dublin 2.