This month our in house Insurance Broker -Vijay Singh writes about three things you should check on your mortgage repayment cover:
1. How long will your policy pay out for? We are surprised at how many people add on a policy to their home loan which pays out for a 6 month term and think they will be covered for a lot longer. The payment term stipulates how long you can claim for and we recommend a payment term till age 65, so that clients are not forced to sell their home.
2. What happens if you change banks? Some covers are linked to the bank you are with, which may seem fine when you start. But what about years from now when another bank offers you a much better interest rate? Will you be able to move your insurance?
Well usually this is not a problem but if your health has changed, full mortgage repayment cover might not be possible.We always recommend taking a cover independent of the lender so that you are able to keep the cover regardless of who the home loan is with. These days covers are available which also automatically change to an income cover after you have paid off your mortgage.
3. Did you read what you had signed, many health questions get overlooked when taking a policy. This can cause serious issues if and when you claim. Non disclosure is one of the leading reasons for not paying a claim. Basically this is when the insurance provider says; thank you for all your premiums for those many years but you forgot to mention certain health issues when you had signed the application form, so we cant pay your claim – in fact we may even cancel all your policies.
We recommend that when you take your policy – read what you are signing for and answer all the health questions carefully. We always go through a thorough health questionnaire to ensure we set up a safe usable policy.
Call us today to book a no obligation review of your covers on 09 625 4693.
