Can The Bank Ask To Be Put As A Benificiary On My Life Insurance?
Posted December 20, 2009 – 10:20 pm in: structured settlements FAQI work in Iraq and am applying for a mortgage, HBOS says it won’t release the money unless i put them as primary beneficiary on my work insurance even though i have a separate full life cover policy in the UK, is it normal for a bank to make that sort of demand or they just being unreasonable after nearly bringing the country to its knees
Tags: Bank, Benificiary, Insurance, Life
5 Comments
It’s not absurd to want to be paid back…especially considering where you work.
Yes, they’re making sure that in the event of your death they’ll get their money back for the mortgage
When applying for a mortgage from a bank, the usual requirement is MRI or Mortgage Redemption Insurance. This will cover the unpaid debts or accounts of the borrower in case of death. So, Bank usually is the beneficiary in this case.Your Life insurance policy in UK is intended for your own protection and for your loved ones.
Note that while I am licensed to sell life insurance in the US, the basic system is similar in the UK, and many life insurance companies that operate in the US are owned by UK companies.
Yes, it is not uncommon for a bank to require life insurance coverage for the amount of your loan. However note that you should be able to apply for a separate policy specifically for this purpose. That should satisfy their requirements.
http://www.portland-lifeinsurance.com/
Think for a moment about the purpose of their request. It is to ensure that the debt you owe to them is repaid in the event that you should die before the mortgage is redeemed.
If you do not want to have the bank as a beneficiary on your work’s insurance policy, arrange another suitable life insurance policy and have the bank as a beneficiary on that policy.