Offer to purchase question

APoc184 said:
Here comes another stupid question.

So Property Insurance is sorted. Our broker is 40% cheaper than Outsurance who was recommended by FNB on the bond approval quote. (Might still play them off against each other but I prefer keeping everything with one broker)

As for Life Insurance. Still need to get an official quote from FNB Life as indicated by Bond approval quote.

Credit Life Insurance Clause in quote states:



It then goes on to quote an estimated monthly premium of R1700 for such cover. Seems a bit steep to me.

Question 1: Because wife and I are joint buyers, do we both need to have Insurance for the "Total Outstanding Obligations"? Or only myself as the debit order and payments will be coming from my side.
Question 2: Can I use a Life Insurance provider of my choice if it meets the criteria of the bank and the bank is named as a party of interest.
Click to expand...
Are you sure you need the life cover for the bond?
Are the lawyers asking for it?
 
APoc184 said:
Here comes another stupid question.

So Property Insurance is sorted. Our broker is 40% cheaper than Outsurance who was recommended by FNB on the bond approval quote. (Might still play them off against each other but I prefer keeping everything with one broker)

As for Life Insurance. Still need to get an official quote from FNB Life as indicated by Bond approval quote.

Credit Life Insurance Clause in quote states:



It then goes on to quote an estimated monthly premium of R1700 for such cover. Seems a bit steep to me.

Question 1: Because wife and I are joint buyers, do we both need to have Insurance for the "Total Outstanding Obligations"? Or only myself as the debit order and payments will be coming from my side.
Question 2: Can I use a Life Insurance provider of my choice if it meets the criteria of the bank and the bank is named as a party of interest.
Click to expand...

Push back on the life cover nonsense....
 
Fcon_Vpro said:
Are you sure you need the life cover for the bond?
Are the lawyers asking for it?
Click to expand...

It is stated in the Special Terms & Conditions:

It is a condition of this Agreement that the Customer/s obtain and maintain credit life insurance to the satisfaction of the Lender,
for the duration of this Agreement. Such credit life insurance must, at a minimum, cover the Customer's total outstanding
obligations in the event of the Customer's death or permanent disability, and 12 (twelve) months repayment amounts cover in the
event of the Customer's temporary disability, occupational disability and unemployment or inability to earn an income. For this
purpose FirstRand Life Assurance Limited or its agents will contact the Customer.
Click to expand...

Lawyers have not asked for it yet. But we would like to have all our guarantees in place for when they do need it.
 
life cover is mandatory on a bond, the lawyers will not be able to process without it, and it will be set to the bank as the beneficiary such that you cannot sneakily cancel it.
 
Steamy Tom said:
life cover is mandatory on a bond, the lawyers will not be able to process without it, and it will be set to the bank as the beneficiary such that you cannot sneakily cancel it.
Click to expand...

Definitely not mandatory.. I told the bank to get knotted and they didn't ask for it any further.
 
I don't really mind the insurance. Peace of mind if something should happen to me to know wife and kids are sorted.

I do have a life policy at work but doubt it will cover all those criteria and wife is not covered under it at all. Only as a beneficiary.
Which is why I wondered if we both need the cover in place to meet the criteria.

Might ask the business broker to just amend my current life policy at work to include all the T&C's of the bond.

And R1700 monthly premium from FNB Life seems really rough for only R1.5m cover.

I will ask the attorneys tomorrow if I can scrap the clause or if I can at least get my own quotes. Sure if I can do it with Property Insurance, I can do it with Life Insurance.
 
APoc184 said:
I don't really mind the insurance. Peace of mind if something should happen to me to know wife and kids are sorted.

I do have a life policy at work but doubt it will cover all those criteria and wife is not covered under it at all. Only as a beneficiary.
Which is why I wondered if we both need the cover in place to meet the criteria.

Might ask the business broker to just amend my current life policy at work to include all the T&C's of the bond.

And R1700 monthly premium from FNB Life seems really rough for only R1.5m cover.

I will ask the attorneys tomorrow if I can scrap the clause or if I can at least get my own quotes. Sure if I can do it with Property Insurance, I can do it with Life Insurance.
Click to expand...

sounds ridiculous, depending on factors and what not your premium should more likel;y be like <R500
 
APoc184 said:
It is stated in the Special Terms & Conditions:



Lawyers have not asked for it yet. But we would like to have all our guarantees in place for when they do need it.
Click to expand...
On your homeloan agreement under section 2.12. Credit life insurance , what does yours say?
 
Fcon_Vpro said:
On your homeloan agreement under section 2.12. Credit life insurance , what does yours say?
Click to expand...

As quoted before.

Unless specifically stated in the special terms and conditions of this
quotation, a credit life insurance policy is required for the duration of
the Agreement. Such credit life insurance must, at a minimum, cover
the Customer's total outstanding obligations in the event of the
Customer's death or permanent disability, and 12 (twelve) months
repayment amounts cover in the event of the Customer's temporary
disability, occupational disability and unemployment or inability to
earn an income, where the Customer/s qualifies for such benefits
and in line with applicable legislation.
Click to expand...

And then in the Special T&C's

It is a condition of this Agreement that the Customer/s obtain and maintain credit life insurance to the satisfaction of the Lender,
for the duration of this Agreement. Such credit life insurance must, at a minimum, cover the Customer's total outstanding
obligations in the event of the Customer's death or permanent disability, and 12 (twelve) months repayment amounts cover in the
event of the Customer's temporary disability, occupational disability and unemployment or inability to earn an income. For this
purpose FirstRand Life Assurance Limited or its agents will contact the Customer.
Click to expand...

But luckily I saw the last bit on the next page. Never paged over. :rolleyes:

FirstRand Life Assurance Limited a registered life insurer, licence
number 00102/001, registration number 2014/264879/06, will
provide a quotation and necessary disclosures to the Customer
separately from this quotation. In the event that the Customer
accepts the policy, then a fee may be payable to the Lender by
FirstRand Life Assurance Limited, which will not exceed the
maximum as prescribed in the Long Term Insurance Act No 52 of
1998. The Customer has the right to provide a policy of his/her own
choice.
Click to expand...
 
I have not seen a bond that requires Life Insurance in a long time, but if the attorneys require it then just get a quoite from your own insurer.

The Life Insurance requirement should be under special conditions on the bond approval, if it is not there then the attorneys will not require it. You can confirm this with them, the bond secretary should be able to tell you immediately. If it is a requirement then get it sorted asap, it can cause delays if not in place.
 
Yeah, our bond quote didn't mention anything about mandatory credit life insurance in the Terms and Conditions. The only mention of it was these two line items:

1597903825458.png
1597903840340.png
 
So phoned the attorneys this morning and asked if it is possible to drop the clause from the bond.

She said she will ask for an amendment but it will take a day or 2 unfortunately.

She was actually surprised that it was loaded on our bond and said that usually properties over R1mil is not a requirement and because we are young and first time buyers. So she sounds hopeful that it can get dropped.

Oh well. Now we wait until Monday again.

Meanwhile we will get all the other insurance and quotes in place.
 
So my stupid questions are not so stupid after all.

If I never asked, we would just have accepted that it is standard practice to have that in place. And seeing you guys say it is most certainly not a requirement most of the times might just save us an extra R1000 per month.

Hopefully this section in the thread will also help other potential buyers. Make sure to check all the terms and special conditions. And ask for them to amend it.

In our case we fked up again because we were a bit hurried to get the quote approved because of the deadline and not wanting to need the extension.

If it gets dropped then Round1 of drinks are on me at the next MyBB meet?
 
What are the benefits of using a bond originator vs doing the bond applications yourself?

My uncle was telling me that once a bond originator submits a request for a bond on your name at bank x, you cant approach them privately to negotiate the rate? Is that true?
 
Well in our case it was mostly because of the sheer convenience.

They apply to all 4 banks at the same time and send you each quote as received. Then you ask them to renegotiate and play the banks off against each other.

No clue about the negotiating privately. Probably true though. But they already have much better relationships with the banks so I let them do the negotiating for me. And they do try a bit harder when you ask for better deals. Because in the end they get their kick back from the back. Doesn't cost you a cent.
 
Midnights_Ghost said:
What are the benefits of using a bond originator vs doing the bond applications yourself?

My uncle was telling me that once a bond originator submits a request for a bond on your name at bank x, you cant approach them privately to negotiate the rate? Is that true?
Click to expand...
This is true, I got a way better rate applying by myself at one bank compared to the bond originator. They also refused to ask their banks to match/beat my quote.
 
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