Choose life cover for your bond

Do you need life insurance for your bond?

Posted  December 5, 2012

After years of waiting and just as many years of saving you are the proud owner of your own property, be it an apartment, townhouse or sprawling suburban home. To purchase your new home you no doubt took out a home loan or bond from a bank or mortgage originator. At this time, you would have been informed that you need to take out a life insurance policy to cover the amount that you owe to that institution. This is simply their way of ensuring that any money you owe them will be recovered in the event of your death. But did you know that you are free to choose a life insurance company of your choice?

As with all things in life, it is always best to shop around and source a couple of life insurance quotes from a range of providers to ensure that you get the best deal possible. When it comes to good deals you cannot match 1Life's Pure Life Cover for affordable life insurance that is quick and easy to buy.

You can source a quote and buy the cover you need on our mobi site and website or by simply calling our call centre on 0860 10 53 40. When you purchase your 1Life Pure Life Cover policy, be sure to nominate your bank or mortgage originator (finance house) as the cessionary of the policy. This means that you cede the policy to them, in other words in the event of your death they are the sole beneficiary of your policy should your life cover and your bond amount be the same. Alternatively, if your life cover amount is more than your bond amount, your finance house needs to specify what portion of your life cover should be ceded to them.

Your loan amount will naturally decrease over the years, however the ceded amount of your life cover will not automatically be decreased. Make sure that you amend your policy on an annual basis to decrease the amount that has been ceded to the finance house. In order for you to do this you would need a letter from your finance house stating what the outstanding “owing” amount is. Once your bond has been paid up, you will need to get a cession cancellation letter from your bank advising that they no longer have an interest in your life policy. You will have the option to nominate your own beneficiaries (e.g. children).

If you have any questions, please contact us on 0860 105 194 or e-mail us on clientservices@1life.co.za.

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