Cohabiting Couples and why Choose a broker
Let’s start at the beginning shall we, simply put the banks cannot offer you the same range of products as brokers (no matter what they try to tell you)
Let’s take for example Dual Life mortgage protection. Banks can ONLY offer Joint life, now what does this all mean I hear you ask; Dual life sounds more like we will be drawing swords at dawn! No such drama thankfully Joint life means that you are both on cover but only pays out on the first death and the policy ends, Dual life literally means both of you on cover at all times and will pay out twice!
Banks will tell you that you need life assurance with them to drawdown your mortgage.
Let me tell you, you do not! They are simply trying to sell you more to reach their targets.
All you need legally is a bog-standard decreasing term mortgage protection policy end of story!
Banks Do not advise they sell – remember those targets?
Take Steve and Irene, madly in love and planning a future together not married off they go to bank and are sold a joint life policy to cover mortgage of €300,000 and a life assurance policy for €200,000. Happy days mortgage drawn down and covered in case the worst thing happens!
Fast forward fifteen years and 4 kids later and Steve meets his untimely end. Irene contacts the Life company to arrange her claim. All fine and dandy until it turns out She now has a massive tax bill to deal with as well as losing the love of her life.
The mortgage protection is straightforward in that the mortgage will be paid off but there is a snake waiting in the grass to pounce! The most you can inherit from a partner in this country is €16250 so now Irene has a house, no Steve, and a tax bill of €44137 on the family home!! Thanks Revenue grrrrr
Now we move on to the life policy for €200,000 which will be paid out to Irene but because she wasn’t married to Steve they are classed as strangers and because she has already used up her allowance of €16250, she will now be taxed at 33% on €200,000 leaving her with another tax bill of €66000.
In total her tax bill is now €110,137 which means she has €90000 left to raise 4 kids on her own!
There is a dwelling house exemption rule https://www.revenue.ie/en/gains-gifts-and-inheritance/cat-exemptions/exemption-for-dwelling-house/index.aspx but come on who needs that hassle at an already difficult time in your life!
No, you don’t have to get married unless you want to, just talk to us and we will review what you have and help you make the necessary changes if needed so Mr Taxman gets as little of your hard-earned cash as possible.
More Choice with a Broker
All of the Irish Banks apart from Bank of Ireland (they are tied to New Ireland) are tied to Irish Life so can only offer you Irish Life Products and if they turn you down you will have no option but to go to a Broker anyway so why not start with one where you will have access to six different companies!
Your Bank owns the mortgage policy if you take it out with them!
Yes, the bank owns it, not you! So, any payout will go directly to the bank and if you have a serious illness attached to your mortgage policy (you shouldn’t but that’s another day’s ramblings) that too will be paid to the bank, taking away your freedom of choice! You might want to continue to pay your mortgage and use lump sum for recovery or blow it all in Vegas but if it’s not yours well you can’t do that!
Now what? Are you still here and reading? Great I didn’t bore you to tears.
Why not click here and book a call with us https://davidkelleher.ie/arrange-a-consultation/ and we can find out how your existing policies are set up!
This is worth an hour of your time and may save you thousands!