Do you have your personal insurance through a bank?

If so, it might be time to speak to an Insurance Broker…

On a weekly basis, we are coming across good people who have used a bank to take out a mortgage, and as a result have taken out an insurance policy because “the bank said I had to”. While it is a good thing that the banks are suggesting that you get an insurance policy, it isn’t a good thing that the insurance they provide may not be what you think you are paying for…

For example, a Mortgage Repayment Insurance Policy will take care of up to 115% your mortgage repayments if you can’t work due to illness or injury for a claim term up to age 65, if required. Most mortgage repayment policies will NOT OFFSET ACC which means that if you do utilise your policy and make a claim due to an accident or injury, you are entitled to your ACC payments as well as your mortgage repayment policy claim payments.

Last week I assisted a client of ours who had a Mortgage Repayment Insurance Policy through a major bank in New Zealand. Here’s what the client didn’t realise:

  • There were ACC offsets! If they had claimed for injury through ACC for the amount they were covered for through the bank, this bank policy would NOT pay aswell.
  • The claim payment term was limited to 2 years (there was no option to age 65).
  • Maximum coverage was less $4,000 per month which in Auckland, is not enough in some cases.
  • They had a Critical Illness Benefit attached to the policy, which only covered them for 12 conditions – we only give advice on Trauma Policies that cover over 40 medical conditions.

I was able to offer a better, more comprehensive & CHEAPER insurance option – WIN WIN WIN situation for our client.

Talk to an Insurance Broker before you take out an insurance policy. If you’re paying for it, you may as well be paying for the most relevant insurance for you.