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?
Thanks

#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

 

Trying to speed up the inevitable

As the waiting game of late pregnancy continues, this mum considers a few things that might hurry things up a little.

One month later: where is William Tyrell?

It has been a little over a month since William Tyrell disappeared from his grandmother's home, 33 long sleepless nights for his family as they mourn the absence of their cheeky young boy.

Winter's child less likely to be moody: study

Babies born in the summer are much more likely to suffer from mood swings when they grow up, while those born in the winter are less likely to become irritable adults, scientists claim.

Single mum of two creates award-winning baby app

Suddenly single with a baby and an 11-year-old son, Tara O?Connell developed an app to improve the lives of mothers who were similarly overwhelmed.

Food for thought: looking after yourself as a new mum

As soon as your baby enters the world, everything else takes a back seat - even the necessities of daily life such as eating are severely compromised, right when you need energy the most.

'Grabbable guts' campaign aims to cut toxic fat

The Live Lighter campaign will take people inside the human body to show the internal dangers of being overweight.

The best and worst month of my life

A new mum's first month of motherhood didn't pan out as expected when she lost a family member weeks after her baby's birth.

Facebook and Apple offer to pay female staff to freeze their eggs

Facebook and Apple are hoping to provide women with the freedom to build their careers without the added pressure of having children at or by a certain age.

How a pregnancy contract could work for you and your partner

The idea of making a 'pregnancy contract' with your partner may sound a bit silly at first, but it can help make the transition to parenthood a lot smoother.

Finding a mum-friendly personal trainer

Burping babies vs burpees – yes, new mums and personal trainers live in different worlds. But they can work together - once you find the right match for you and your lifestyle.

Ambulance service under fire: baby seats to go, response times 'worse than ever'

The NSW Ambulance Service is removing child-safety seats from ambulances, while the Victorian service is facing criticism over lengthy response times following the death of a three-year-old.

Alleged baby snatch incident a ?misunderstanding?, say police

Police say that an incident in which a man pulled on a woman?s pram while walking a popular Sydney route late last month was a misunderstanding.

Ebola killed my aunt and is shutting down my country

Three weeks ago, my auntie, a midwife, developed a fever. Sitting here in Sydney basked in Australian sunshine, that shouldn't be big news.

The night my ovary burst

One mum shares her frightening experience and vows to never take her health for granted again.

Is e-reading to your toddler story time or just screen time?

When reading increasingly means swiping pages on a device, and we're advised to read to their children early and often, should parents be turning to e-readers for storytime?

Community mourns inspiring young dad

A young dad who fought a five-year battle with cancer has been remembered for his inspiring legacy at a funeral service attended by hundreds of family and friends this week.

Meningococcal kills Queensland toddler

Public health authorities say the death of a toddler in north Queensland from meningococcal disease highlights the danger the illness poses.

Nicole Kidman: 'I hope every month that I'm pregnant'

Nicole Kidman is hoping to add to her family, but says she's doubtful it will happen.

Recall: Aldi Wooden London Bus play set

Aldi has announced a recall of their popular Wooden London Bus play set.

Great gift ideas for first birthdays

From soft toys to balance bikes, here are some great ideas for first birthday gifts.

Mum learnt she was pregnant hours before giving birth

Kim Walsh arrived at the doctor with abdominal cramps. Hours later, she was cradling the baby experts told her she could never have.

How cancer has made me a better, happier person

I'm a far better person post-cancer than I ever was before. The goal now is to stay around long enough to find out who I can become, and what I can achieve.

Download now: Essential Kids Activity Finder app

Got bored kids? Quickly find the best activities for kids wherever you are in Australia with the Essential Kids app.

 
Advertisement
 
Advertisement
 
 
 

What's hot on EB

16 parenting truths you won't find in the baby books

I am five years into this parenting gig and I’ve learnt that sleepless nights and changing dirty nappies are child’s play.

Win 1 of 5 Canon Powershot D30 cameras

Capture life more easily with the Canon Powershot D30. Shockproof, waterproof and dustproof, you can take it almost anywhere and shoot beautiful images, time after time. Enter now!

Best and worst potty party cakes

It's nice to celebrate a child making the shift from nappies to 'big kid' undies, but do we really need a semi-realistic used toilet cake to do it? Here are some of the best and worst cakes parents have used at 'potty parties' around the world.

7 tips for a financially festive Christmas

Plan ahead - and do it now - to ensure festive season expenses don't break the bank.

'Go the F*** to Sleep' author's new book for frustrated parents

A sequel is coming soon to the 2011 hit book 'Go the F*** to Sleep' - and this time, it's about mealtimes.

Great birthday party buys from Etsy

Handmade crafts to decorate and personalise your child's next birthday - from banners to cake decorations, we've got gorgeous party finds from Etsy.

Creative storage ideas for the kids' rooms

Creative and practical storage ideas for the kids' toys and books can also add some stylish decor to your home. Visit babyology.com.au for more stylish modern finds for hip kids & parents.

Warnings over child pain relief doses

The Therapeutic Goods Administration has warned parents and carers over a "confusing" pain relief dosage system.

To the mum in the doctor's waiting room

Maybe the mum I saw in that waiting room, seemingly disconnected from her baby, doesn’t have the support she needs.

10 space-saving nursery ideas

Starting a family doesn't always mean moving into a bigger house - not yet, anyway.

 

What's in a name?

Baby Names

Looking for a classic name, or an unusual name? Our Baby Name Finder is for you, search or browse to refine your shortlist.

 
Advertisement
 
 
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.