Jump to content

Loan insurance through bank

  • Please log in to reply
4 replies to this topic

#1 lazno

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?

#2 kjdean1988

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

#3 DK3000

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....

#4 CallMeFeral

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.

#5 MrsLexiK

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.

1 user(s) are reading this topic

0 members, 1 guests, 0 anonymous users


Mum's desperate plea as whooping cough alert issued

A desperate mother has shared a heart-breaking video of her baby struggling to cope with a coughing fit caused by pertussis.

After three years, Ranjini is free at last

Ranjini, the Sri Lankan mother of three who has spent more than three years in detention after being deemed a national security threat by ASIO, has been freed.

Pregnant woman 'safe and sound' thanks to Bataclan concert hall hero

A pregnant woman who clung for life from a second-storey windowsill during the Paris terror attacks is reportedly "safe and sound".

Why are due dates important?

From the moment you discover you are pregnant you look forward to your baby's arrival.


Welcome Christmas with your family with the Essential Baby Christmas section with lots of gift guides, activities and tips for a happy holiday.

The contest that takes advantage of desperate couples

who would use the pain of infertility as an advertising tool? Who would take the personal tragedies of infertile couples to promote their own business?

Win ABC Shop prize pack for Christmas

What a boon it would be to have your toddler's Christmas gifts covered this year. We have two awesome ABC Shop prize packs to give away to two lucky winners.

Hero dad lost his life protecting hundreds of others

He was an innocent man caught in the middle of a murderous attack on his city. But instead of running the other way, Adel Termos made a heroic decision that saved the lives of many others but cost him his own.

Text service aims to fill the void for new fathers

A new text service for fathers aims to guide men through the life changing experience of having a child.

How to grow your own groceries

Follow these 31 tips to save money and enjoy time in the garden in the kitchen.

5 great things about having a baby

Having a baby is exhausting, hard work. It's also one of the greatest joys of your life.

Sick baby could die without scarce special formula, mum says

Lizzie Cann is down to her last three tins of a special formula in short supply.

Women sue over birth control pills

More than 100 women who became pregnant after taking birth control pills have filed suit in the US.

'Their footprints are never too small to leave an imprint on this world'

When she took the pregnancy test and two lines showed up, we were both ecstatic. We couldn't wait to meet our baby.

Squeaky shoes foil adorable toddler

We're probably all familiar with the pouty bottom lip and tightly crossed arms of a tot mid-strop.

Best bands to get families dancing

I'm not talking music made especially for kids here. I'm talking music from my childhood and it's the kind to really get down to (or not).

What are pregnant women Googling?

Pregnancy is a huge change for any woman, so it's natural we'll have questions - and turn to Google to ask them.

'I want him to forgive me'

As the mother of a baby born in detention, this asylum seeker feels guilt for bringing a new life into an uncertain world of incarceration.

The unethical claims helping drive demand for formula in China

Chinese parents are being led to believe formula will enhance their child's brain development, sparking a huge demand and impacting Australian stock.

Coffee could help you live longer

New US research found people who report drinking three to five cups of coffee a day are less likely to die prematurely from heart disease, suicide, diabetes or Parkinson's disease.


What's hot on EB

Win one of two ABC Shop prize packs in time for Christmas

What a boon it would be to have your toddler's Christmas gifts covered this year. We have two awesome ABC Shop prize packs to give away to two lucky winners.

Beautiful 'now and then' images of premature babies

They are stunning photos that the parents of these beautiful no doubt feared they may never see.

Physios warn pregnant women not to crunch like Michelle Bridges

Experts are urging pregnant women not to do exactly as Michelle Bridges does when exercising, or they risk developing rectus abdominus diastasis.

Penny-pinching supermarket shoppers switching in droves

Half of Australia thinks it can get cheaper groceries by switching supermarkets, and about one in four of us have already switched.

Baby breastfed by wrong mother after hospital mix up

A newborn baby has been breastfed by a stranger after a NSW hospital bungled the identities of two newborns, devastating one mother and potentially exposing the newborn to health risks.

Nurses invent skin to skin c-section drape

The determination of three US nurses to provide immediate skin to skin contact to mothers delivering their babies by caesarean section has led to the invention of a unique surgical drape.

Baby's first photo shoot features a special guest

You can always be sure of a few things not entirely going to plan during a newborn shoot – little accidents are almost par for the course – but this shoot was memorable for a whole other reason.

We are not the family you think we are, I promise

Kids have a way of presenting a completely inaccurate impression of you, as parents, and as a family.

The hidden harm of foetal alcohol syndrome disorder

Experts believe many children diagnosed with ADHD might actually have FASD and that the number of people suffering from the condition across the country could be as high as 500,000.

Anaesthetist facing charges after ignoring woman's pain during caesarean

An anaesthetist could be punished after telling a woman enduring an "excruciating" painful C-section that she was not actually in pain.

When your baby starts life in NICU

Our daughters are finally home after spending nearly four weeks in the Neonatal Intensive Care Unit (NICU) at Wellington hospital.

How to save for a deposit while renting

As hard as it sounds, it is possible to save money when you rent, and certain things can be done to build a deposit faster.

Medications pregnant women should take, avoid, and think about

There are actually very few medications that must be absolutely avoided during pregnancy.

Paid parental leave uncertainty a growing concern

Eight months out from the due date of the government's PPL cut, some expectant parents are facing an uncertain time.

7 commandments of using the internet as a parent

What you need is careful, objective and repeatable science. Not anecdotes or old wives' tales, but data.

A rethink on screen ban for kids under two

With new guidelines being developed, the discouragement of use below two years of age is being revised.

10 things I want my wife to know

It's on those crazy days that I must remember to stop and let her know some things she needs to hear.

Better education about SIDS needed as deaths plateau

The number of sudden and unexpected deaths in infancy has decreased in NSW for the past 15 years but the most recent report into child deaths reveals the decline has plateaued.



Can't decide?

Check out the Essential Baby Names section for some inspiration

Essential Baby and Essential Kids is the place to find parenting information and parenting support relating to conception, pregnancy, birth, babies, toddlers, kids, maternity, family budgeting, family travel, nutrition and wellbeing, family entertainment, kids entertainment, tips for the family home, child-friendly recipes and parenting. Try our pregnancy due date calculator to determine your due date, or our ovulation calculator to predict ovulation and your fertile period. Our pregnancy week by week guide shows your baby's stages of development. Access our very active mum's discussion groups in the Essential Baby forums or the Essential Kids forums to talk to mums about conception, pregnancy, birth, babies, toddlers, kids and parenting lifestyle. Essential Baby also offers a baby names database of more than 22,000 baby names, popular baby names, boys' names, girls' names and baby names advice in our baby names forum. Essential Kids features a range of free printable worksheets for kids from preschool years through to primary school years. For the latest baby clothes, maternity clothes, maternity accessories, toddler products, kids toys and kids clothing, breastfeeding and other parenting resources, check out Essential Baby and Essential Kids.