The Sunday Times - Money Questions 12/04/09

Posted by Jill Kerby on April 12 2009 @ 22:01

RL writes from Dublin:  Our family has a Multi-Trip travel policy with VHI that cost €95 and doesn’t expire until the end of the year.  I was recently made redundant and have lost my VHI cover from work so my husband and I decided to switch all of us to a cheaper provider (Hibernian).  However, when the Hibernian person asked if we wanted travel insurance, I told them we already had it was VHI and they told me that policy was now cancelled. I was never told this when we bought the insurance.  It seems that you can only keep the travel policy if you remain with VHI and there is no refund – in our case for at least seven months worth of payments.  Is this correct?



I’m afraid so.  I checked out the terms and conditions for the multi-trip policy on the VHI website and under ‘Principal Exclusions and Conditions’ it states “All members on a Multi Trip policy must hold relevant Vhi Healthcare Hospital Insurance” and that “Cancellation of your Vhi Healthcare Hospital Plan will result in non-refundable cancellation of your travel policy. There is no refund on any cancelled policies after the 14 day cooling off period” even if you have months to run on the policy. .  According to Dermot Goode, a financial advisor in Dublin who specializes in health and income protection insurance, “None of the insurers will refund your money after the 14 day cooling off notice is over and but VHI is the only health insurer that does not allow the policy to run out if the person switches their cover to Quinn or Hibernian Aviva. Even if your VHI policy expires in 2009 before the travel policy does, and you don’t renew with them, the travel policy will be null and void.”   This unfair condition needs to be amended and you should consider not only formally complaining to VHI, but to the Financial Regulator and your public representatives as well. 







PB writes from Co. Mayo: I have a tracker mortgage with AIB with a balance of €67,000 due to expire in April 2015. My monthly repayments are €578.54 per month based on the tracker rate of 2.1% (margin of .6% over ECB rate). I wanted to reduce the term of my mortgage by exactly five years without reducing my monthly repayments. When I rang the bank less than 12 months ago when the interest rate on my mortgage was at a higher rate than now I was told the it would cost me €21,000. I rang them again last week and was told it would now cost €25,000, but not believing this was an accurate figure, I rang them back the same day and was told it would cost €27,000! I subsequently received a letter confirming the later amount.  In 2006 courtesy of an SSIA, I reduced the term of this mortgage by eight years and it cost me € 32,000!  


I'm afraid these figures don't add up for me. Let’s assume your current tracker rate never changes and you continue to pay the same mortgage repayment for the next six years and four months to April 2015: at €578.54 per month (by 78 months) this is a total repayment of €45,126 – well short of the €67,000 capital balance you say is still outstanding.  I suggest you ask your lender to supply you with a hard copy schedule of payments that shows you how much it will cost you each month to reduce the term of your loan from six years and four months to just one year and four months – that is, over five fewer years – or the size of the lump sum you would need to pay. (Not all tracker loans allow for lump sum payments off the capital, so check that too.)  Reducing the term of a mortgage is commendable, though at these current low interest rates you would be better off reducing more expensive debt like credit cards, overdrafts and personal loans, should you have any. 




JK writes from Dublin: I am interested making an investment in gold.  I have decided not to do business with the agent for Perth Mint, and would prefer to buy into an ETF which tracks the price of gold.  I have contacted my broker (Sharewatch), and they tell me that there are several ETF's that relate to gold prices, and that they can execute trades for those listed on European Stock Exchanges.  I would prefer to avoid the UK stock exchange.  I have found it very difficult to find information about Gold ETF's that might be available on European Stock Exchanges: can you suggest a starting point for me, or better still an ETF that you would consider worthwhile investing in?



ETFs are indeed a cheap way to buy and trade gold and other precious metals with mainly just stockbroking commission and a low annual management fee of usually under 0.5%. But the ETF involves a counterparty risk that you may not wish to take; physical gold that you buy (but must store securely) carries no such risk, nor does buying in certificate form from the likes of The Perth Mint of Western Australia where your gold is kept, assuming of course that it doesn’t shut down or otherwise disappear.  Before you buy a gold ETF or any other kind of gold (the Irish Stock Exchange now sells a gold miner ETF that represents shares in 10 leading gold mining companies) you should do some more research yourself.  There a few recent articles on this site http://goldprice.org/buying-gold/ that will give you a lot of background on the different ways to buy gold ETFs, bars and coins, even buying and selling scrap gold. 


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