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.
1 user(s) are reading this topic
0 members, 1 guests, 0 anonymous users
The Essential Baby & Toddler Show is back this April! Save $8 off the door price for a limited time only!
Sometimes the greatest baby name ideas come from the most unexpected places, as these EB members show.
While we often think of pregnancy as a 40 week affair, experts agree that 37 weeks is actually “full term". So is there an argument for inducing all births at 37 weeks?
Controlled-crying techniques may help some babies sleep through the night, but for many exhausted new parents, it's just a recipe for more tears all round.
As people become more aware of these benefits, I hope more parents will practice this method, so we can cut down on nappies and improve baby bonding.
Aussie actress Emily Symons has announced she is pregnant with her first baby.
A little girl will grow up without her father after the fit and healthy 34-year-old passed away while doing something he had practised his whole life.
You could be doing yourself a disservice by encouraging your toddler to have an afternoon nap, according to new research.
We've compiled a guide to some of the most popular presents for newborns and new mums, and for christenings and naming days.
Actress Jaime King is pregnant with her second child, giving 16-month-old James a sibling.
The Abbott government should extend funding to nannies, and direct childcare payments to low and middle income families, a landmark study on childcare has found.
As many as one in two newborn babies suffer from skin irritations in their first few weeks. So what are the most common rashes and irritations to look out for?
Wall decals are the answer to creating a beautiful nursery or children's space without lifting a paint brush, a spirit level or even a hammer.
Three-year-old Cain Trainor headed off home after his first day at a new preschool without telling anyone.
In spite of being in an almost constant state of motion while looking after the kids and trying to keep things together at home, it can seem as though parents have managed to get nothing on the to-do list done by the end of the day.
The middle name is no longer an afterthought, and parents' inspiration comes from many places.
A new IVF scheme offers couples the chance to fall pregnant and give birth - or get their money back. But there's more to it than you might think.
A baby born still inside the amniotic sac gave US doctors a rare glimpse at life inside the womb.
Three years ago Jason Hughes viciously attacked his ex-partner. Now she has to write to him three times a year.
A West Australian woman will fight allegations that she scammed expectant mums by selling them fake ultrasound pictures of babies.
Got bored kids? Quickly find the best activities for kids wherever you are in Australia with the Essential Kids app.
Top 5 Articles
A Sydney mother who suffered brain damage when she was hit by a car while pushing her newborn baby in a pram has reached a confidential out-of-court settlement with the driver's insurance company.
A culturally sensitive midwifery service has gained the trust and respect of Aboriginal women.
Most mums-to-be plan to take things easy and perhaps have a little break from work as the birth of their baby draws near. Not Kate McCartney.
Announcing that you're expecting can be a time to express your creativity, sense of humour and imagination. Check out how other parents and parents-to-be have broken the news to friends and family.
Last week an un-retouched photo of model Cindy Crawford surfaced, showing the 48-year-old mother-of -two posing in underwear.
Thought your toddler could not love pancakes any more than they already do? How about if the breakfast treat came in the shape of every two-year-old's favourite cartoon character?
I thought I was never going to be able to have a successful pregnancy. I decided that I wasn't going to form an emotional attachment with this baby.
February 18 marks the start of one of the most prolific annual baby competitions in Australia: the Bonds Baby Search. And this year is going to be more special than ever.
This is not something that people like to talk about, but Facebook has announced that it will grant users more control over what happens to their pages after they die.
Mother of four Marie Holmes was financially struggling after quitting her jobs at Walmart and McDonald's in order to care for her children.
A first-time mother whose daughter died hours after her frightening birth insists she was never told of the risks of being obese and pregnant.
She has labelled parents who do not vaccinate their children "misinformed imbeciles" - and for that, she makes no apologies.
Are you one of those that know the whole IKEA catalogue by heart? Love their stuff but want to personalise it? Here's some inspiration to help you realise the potential of IKEA furniture and fittings.
I never thought I’d say this, but for a brief moment last week, Kim Kardashian and I had something in common: both our kids had public tantrums.
Polycystic ovary syndrome (PCOS) is the most common female hormonal condition, affecting roughly one in 12 Australian women.
If doing it on your back is out, what's the best position for labour and birth?
With Valentine's Day coming up, Nat Gilbert could be forgiven for thinking her husband might be planning a surprise for her.
We usually only hear the success stories: tales of the two-year-old who’s talking, running and completely toilet trained. But other stories need to be told too.
Sarah Kiss has a word of advice for proud mums and dads who are keen to enter their babies in this year's Bonds Baby Search Competition - just have fun.
If your family needs to go to sleep school, go with them. You are part of that family and you are part of the solution.
A French court may have ruled out Nutella as a baby name, but that doesn't have to stop you from taking inspiration from the supermarket (or bottle shop). See what parents in the US have chosen for their delicious little ones.
Check out this range of products designed to help make your breastfeeding journey more enjoyable, manageable and convenient.
Win a KitchenAid Mixer
To celebrate, and to thank our amazing fans, we?re giving away a KitchenAid Artisan Tilt-Head Stand Mixer.