Life insurance to cover my homeloan.

[blue-eye-boy]

I have a bond still, and while no one wants to think about that, I dont want to leave my family with debt when I'm gone.

How do I go about choosing the right one? I just need the bond to be settled when I go.

I asked my financial advisor this a year or so back, he did my other life insurance. He told me that my current life insurance is adequit. But I want my family to be well off.

What do you guys think?

 

[D3x!]

I have a bond still, and while no one wants to think about that, I dont want to leave my family with debt when I'm gone.

How do I go about choosing the right one? I just need the bond to be settled when I go.

I asked my financial advisor this a year or so back, he did my other life insurance. He told me that my current life insurance is adequit. But I want my family to be well off.

What do you guys think?

is it not a requirement of your bond

 

[blue-eye-boy]

No, only insurance on the building itself.

 

[goga]

No, only insurance on the building itself.

Work out what you need to have the bond settled, and what your family will need as a capital sum invested to provide sufficient returns for them to live off reasonably. Factor in any rent producing properties you leave in your estate and any other investments / income producers you leave for your family.

Once you know the lump sum figure needed to settle your bond, COVER YOUR ESTATE DUTY (very NB, depending on size of your estate as this will need to be paid in cash to SARS - so can end up needing to sell assets to settle. If you're below the threshold then no worry), use this lump sum for your life insurance purposes.

Not very familiar with insurance/correct returns etc but the above is the gist of what you need to figure out.
Also, make sure you have a proper will - don't die without one as you're making life very miserable for your family.
Depending on where you're at in life (ie: the home you have is the last home you ever intend purchasing and you don't see your family moving from there), consider some estate structuring -> should you place the house in a trust instead of your personal name etc..

 

[Napalm2880]

You might think about getting life cover as well as dread disease cover. Most providers offer the same thing - I'd say start by getting a quote from liberty or momentum and price around from there. The monthly premiums are usually linked to your age.

 

[reactor_sa]

Probably cheapest just to extend your existing life cover. If you have dependents it would be a good idea to make sure you have disability and critical illness cover too.

 

[D3x!]

No, only insurance on the building itself.

ah ok.

my bond requires life insurance and building insurance

 

[blue-eye-boy]

Probably cheapest just to extend your existing life cover. If you have dependents it would be a good idea to make sure you have disability and critical illness cover too.

I'll make sure, but as far as I know, it is included in my current setup. Thats maybe a better idea.

Anyone else have an idea?

 

[SauRoNZA]

I'm pretty sure this is a requirement of the bond. Unless that only applies when more than one party is involved.

You want special cover in place for this not just extending your existing life cover. Reason being that you want this paid off immediately when you die, not depending on your estate being processed and all that which could take months.

 

[blue-eye-boy]

I'm pretty sure this is a requirement of the bond. Unless that only applies when more than one party is involved.

Well it wasn't a requirement with mine, only building.

 

[SauRoNZA]

Very strange. Maybe it's a newer thing or only applicable to some banks.

When did you get your home loan? Mine was in 2010 but is co-owned with my wife.

 

[blue-eye-boy]

Very strange. Maybe it's a newer thing or only applicable to some banks.

When did you get your home loan? Mine was in 2010 but is co-owned with my wife.

It was in 2011, and my house is bought, with my family trust as the owner.

 

[MickeyD]

Very strange. Maybe it's a newer thing or only applicable to some banks.

When did you get your home loan? Mine was in 2010 but is co-owned with my wife.

Is strange...

Good advice in post #5.

 

[LottaFun]

I had this when I bought my first house. Stayed in that house for 13 years and sold the house. What a waste of 13 years installments. I should have taken a standard life policy with another institution that covered the outstanding amount of my bond also.

 

[Hemi300c]

No, only insurance on the building itself.

Are you sure the bank hasn't taken a policy included in or hidden in your bond?

 

[reactor_sa]

The banks only require life cover for the bond if they feel they couldn't get the bond amount back if they had to sell the property. If you put down a large deposit or the property was a real bargain then they won't require life cover for the bond. I only got a 80% bond and the bank didn't request life cover because they could easily sell my property to recover the bond amount.

 

[D3x!]

The banks only require life cover for the bond if they feel they couldn't get the bond amount back if they had to sell the property. If you put down a large deposit or the property was a real bargain then they won't require life cover for the bond. I only got a 80% bond and the bank didn't request life cover because they could easily sell my property to recover the bond amount.

I put down a large deposit and the bank could easily sell the house for the value back yet I require it...

 

[D3x!]

I'm pretty sure this is a requirement of the bond. Unless that only applies when more than one party is involved.

You want special cover in place for this not just extending your existing life cover. Reason being that you want this paid off immediately when you die, not depending on your estate being processed and all that which could take months.

i am one party and it applies to me, I suppose it depends on the bank

 

[greg_SA]

My previous bond (10 years ago) was a 105% bond - the bank automatically signed my up for life cover. I noticed that this was a rubbish policy, so after 2 year, I cancelled it. They required a new life insurance policy to be ceded to the bank, which I did. However, after the value of the house had increased, I could remove the cession.

So what SauRoNZA said is correct. D3x! you should be able to cancel your life insurance, or remove the cession at the bank.