Jump to content
Loan insurance through bank
4 replies to this topic
Posted 09 November 2012 - 10:14 AM
Do you have insurance on your home loan through the bank?
We have insurance to cover death and loss of job etc. but it's costing a small fortune every month as we have our home loan and a personal loan split so 4 loans and 4 lots of insurance all up
We have a death benefit through superannuation that would cover the loans if one of us died. Do we still need the insurance for each individual loan?
Is it better to just get an income/ death insurance through a separate company that will cover all loans in one payment?
Posted 09 November 2012 - 10:23 AM
I advise you to keep it. My parents had insurance on their homeloan and cancelled it because they thought they were paying so much money for nothing. Two months after they cancelled it My dad went to the doctor and was diagnosed with terminal liver cancer. When he passed all my mum had was the separate life insurance. Which wasn't enough to set her up till retirement. When this happened my parents were mid 50's. Ever since I've made sure to have loan and income protection insurance. Just because unfortunately you never know what's around the next corner.
Perhaps you could ring and ask for a discount on the insurance. Im wit NAB and thought id give it a go. Due to having my home loan, car loan and credit card insurance all with them they gave me a 15% discount on each policy. Worth asking i think
Posted 09 November 2012 - 10:30 AM
Also, I think the premiums you pay are tax deductible?
But it's always worth shopping around and comparing cover vs prices....
Posted 09 November 2012 - 10:34 AM
Depends what it covers, and in the end what risk you want to bear and how much you want to pay to cover it is up to you. Being underinsured can end badly, being overinsured can cost you a lot of money over your lifetime and end up never being needed.
It also depends on what the terms are that the loan insurance would pay out on, vs your life/income protection insurance.
For me personally, I would do life and income protection insurance and skip the loan insurance, unless the loan insurance was significantly cheaper or covered more situations. Mainly because the life/income protection insurance a) covers you in general regardless of how much is left on your loan, and you can factor the loan amount into it, and b) I believe that it's beneficial to get adequate life insurance while you are young and healthy because it becomes hard to get into if/when you are diagnosed with illnesses, so it's more of a long term plan than a short term duration of the loan thing. Obviously this only holds if the life/income protection insurance IS high enough to allow for paying back the loan.
I think of loan insurance as something that really protects the bank more than it does you.
But like I said, that depends on the costs and the terms of it - only you can decide.
Posted 09 November 2012 - 10:39 AM
You could get another policy which is the lump sum of all 4 loans (there are normally large sum discounts built into policies. EG: $250K may cost $40 a month but $500K may only cost $60 a month)
We didn't need insurance as our loan did not put us into the "must need" category. We did get it though as I think it is stupid to not have it (but I work in insurance) For each of us there is enough to pay out debt and have some left over, we could then either buy an investmant outright (so get rental income) or we could just live off x amount.
You will not find insurance outside of the bank that will cover loss of job for reasons other then sickness or injury (from my experience). I have this on my CC cards and had it on my personal loan when I was single and before I actually had life insurance or Trauma insurance or income protection. We choose not to take this out with our mortgage BUT we can put our mortgage on hold due to loss of employment.
You would have to talk to your bank about whether you would be able to cancel the Life isnurance part but keep the loss of income part. (Also investigate whether or not it is for loss of your job through anything other then sickness or injury)
If you cancel the life insurance you may have to provide a certificate of currency to the bank to prove you have the insurance that they require. Remember though that part of your death benefit in your super is made up of your actual Super so just make sure you are using the Death Benefit/Terminal Illness benefit and it hasn't automatically calulated the Super in. My does this but my DH's Super fund sets it out more easily to read.
0 user(s) are reading this topic
0 members, 0 guests, 0 anonymous users
Women shoulder the time-intensive and routine tasks - and they're also more likely to do the least enjoyable tasks like scrubbing the toilets versus washing the car.
Does giving children food as a reward turn them into emotional eaters?
Two photos of mums have shown the world the physical impact of exhaustion in all its frazzled glory.
Pregnancy announcement videos have become so popular they're becoming businesses all their own, with YouTube compilations, Pinterest pages and morning television segments.
It's an idea that makes some people feel excited, while others shudder at the increased difficulty.
A terrifying car crash that left Danni Bett lying in hospital in a neck-brace wasn't enough to stop her from breastfeeding.
A Welsh couple have realised their newborn has a striking resemblance to a certain celebrity chef.
An adorable toddler and his toy truck in a photo series that'll melt your heart.
I want my children to grow up and know it's okay to feel strong emotion and to display it. Vulnerability and imperfection do not equal weakness.
For your own husband's parents not to come to your wedding is an utter embarrassment.
A teenage boy has undergone surgery to remove a foetus, complete with hair, legs, hands and genitals, removed from his stomach.
Even one-year-olds can be very exploratory, experimental and creative.
The short and long term consequences of controlled crying are under the spotlight with new Australian research suggesting no harm results from the practice.
If the tooth fairy takes teeth away, it must be something like a goblin who brings them in the first place.
Three-year-old Henry died in February this year, just a few hours after falling ill.
A Saudi man has been arrested after shooting the male obstetrician who delievered his baby because he was unhappy the doctor had seen his wife naked.
First, baby Zyla tried her trick on cushy, beige carpet.
How often have you been told "Just give your breastfed baby a bottle of formula at bedtime to make him sleep"? But does it work?
She might be a Hollywood superstar, but the gorgeous Anne Hathaway feels just as self-conscious as other new mums trying to get back in shape after having a baby.
In a moving 3000-word Facebook post, Dan Majesky has shared a painful journey of infertility, with a big surprise at the end.
Facebook has come under fire after banning an ad featuring Tess Holliday, a plus-sized model, wearing a bikini.
It was a moment filled with joy but tinged with sadness.
Top 5 Articles
Bethani Webb was excited to find out she was pregnant, but the first time mum did not realise she was carrying four babies not one.
A Sydney cafe is offering breastfeeding mums free cups of tea in a bid to show support for the right of women to nurse their babies wherever they choose.
Jamie Oliver, who considered a vasectomy, is to be a father again. A fellow dad reflects on his own decision 11 years ago
To everyone's surprise, Kristen Miller "kept doing better each day", keeping her second baby safe.
Before my son was born I was given a lovely baby book full of blank pages waiting to be filled with weights and heights and first words.
There is no doubt seeing their child smile for the first time is an unforgettable moment for parents everywhere.
When Alison Johnson put her 18-month-old Caleb down for a nap, she had no reason to believe her son was in any danger.
All my panic and tears aside, my biggest question looking back is about the kind of security measures used in the maternity ward.
Everyone who visits a mum in hospital in the days following childbirth wants to get a photo with the new baby.
Finally, there's a way to keep warm while breastfeeding through winter.
What to do with this information? My advice would be to try not to think about it during the throes of passion.
From niplash to tight boobs, biting to milk supply issues, Pinky McKay looks at common breastfeeding issues and how to solve them.
Six months on we're all still alive, and the more we get to know each other the easier the days become.
Kirsty Carrington thought nothing of giving her newborn son a kiss, little did she know it would leave the baby fighting for life.
After children, 'me time' looks a little different.
A stroller can make or break travelling with a baby or toddler. Here are 15 great single travel stroller options.
It always pays to remind yourself of how terrific toddlers can be - they're little like this for such a short time
Take a trip down memory lane with these vinage and retro toys that you may have had in your childhood or your parent's childhood.