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If something happens to you, your family shouldn't also have to worry about what happens to the home you've worked so hard to provide.
A life insurance for home loan solution can help ensure there is money available to deal with outstanding bond debt, helping protect your family's financial future.
Why your bond needs cover
For most South Africans, a home loan is one of the largest financial commitments they will ever take on.
The challenge is that the bond doesn't disappear if the bondholder passes away. The outstanding balance remains payable and, depending on your family's circumstances, your loved ones may face difficult financial decisions while dealing with a loss.
Without adequate cover, a family could be forced to:
- Use savings to repay the debt
- Sell the property
- Make major lifestyle changes to meet bond repayments
This is why many homeowners consider life insurance for mortgage protection when taking out a home loan.
Learn more about life insurance.
What is credit life insurance?
When you take out a home loan, your bank may require protection for the outstanding debt should unexpected events affect your ability to repay it. This protection can be provided through a range of products, including credit life insurance.
Credit life insurance is a type of cover linked to a loan and is designed to help settle qualifying outstanding debt or assist with repayments if certain insured events occur, such as death, disability, critical illness or loss of income.
Because requirements vary between banks and home loan products, it's important to confirm exactly what cover your lender requires and whether an existing life insurance policy can be used to meet those requirements instead of credit life insurance.
Can I use my own life cover instead?
In some cases, banks allow clients to use their own life cover instead of the bank's credit life solution, provided it meets the bank's requirements.
This is where bond protection life insurance may become relevant.
Rather than taking cover provided through the bank, you are able to take out your own life cover policy and use it to secure the bond by ceding the policy to your bank.
Always confirm your bank's requirements before making any decisions regarding existing cover.
What does ceding a life policy to the bank mean?
A cession is a legal arrangement that gives the bank certain rights to the policy as security for the home loan.
In simple terms, if the life cover has been ceded and a valid claim occurs, the lender may have rights to claim against the policy in accordance with the cession agreement and the outstanding debt.
The exact process and requirements differ between banks, which is why it's important to check how cessions are handled by your specific financial institution.
How to arrange cover through 1Life
Step 1: Get a quote
Complete a quote based on your age, personal circumstances and cover requirements either online or over the phone.
Step 2: Choose your cover amount
Many homeowners choose a cover amount that aligns with their outstanding bond balance. Others choose additional cover to help protect their family against broader financial responsibilities. However, you'll need to select a sum assured that is at least equal to your home loan amount.
Step 3: Get covered
You can complete the process online or speak to a skilled sales consultant. If you have completed your application online, call 1Life Client Services on 0860 10 51 94 to cede your life insurance policy to your bank.
Step 4: Provide the policy details to your bank
If required, your bank will explain its cession process and any documentation needed to link the policy to your home loan.
What affects the cost of your cover?
The cost of life cover for bonds in South Africa is based on several factors, including:
- Your age
- Your gender
- Smoking status
- Health history
- Lifestyle factors
- Occupation
- Cover amount selected
- Policy term (not always applicable)
- Size of the home loan
Every person's circumstances are different, which is why premiums are calculated individually.
To better understand your needs, use these life insurance calculators to find out how much cover you qualify for or how much cover you need.
Get a quote and save up to 13%
Why choose 1Life Insurance?
Simple online quote process
Get a quote online in minutes, wherever it suits you, and save up to 13% on your monthly premium.
Support when you need it
If you need assistance, a skilled 1Life consultant can help you understand your options and answer your questions.
Cover that can be used for home loan protection
If your bank allows independently purchased life cover, 1Life can help you put cover in place that may be suitable for cession to your bank, subject to the bank's requirements.
Explore life cover to learn more.
Protect the home you're paying for
A home loan may be one of your biggest financial commitments, but it doesn't need to become your family's burden if something happens to you.
With life insurance for home loan protection, you can help ensure that your loved ones have financial support when they need it most.
Frequently asked questions
Do I need life insurance if I already have a home loan?
Yes. The outstanding bond balance remains payable if the bondholder passes away, which is why many homeowners take out cover linked to their home loan obligations.
Can I cancel my bank's credit life insurance and get my own cover?
In some cases, yes. However, you should first confirm your bank's requirements before cancelling any existing cover.
How much life cover do I need for my home loan?
Many homeowners start by matching their outstanding bond balance.
What is the difference between credit life insurance and life insurance for a home loan?
Credit life insurance is usually arranged through your bank and linked directly to your home loan. Independently purchased life cover is taken out by you and, if your bank allows it, may be ceded to the bank as security for the loan. Requirements vary between lenders, so it's important to check what your bank accepts before choosing a solution.
Does the payout go directly to the bank?
This depends on the policy structure and whether a cession arrangement is in place. Check your policy terms and your bank's requirements for specific details.
How quickly can I get covered?
You can get a quote online in minutes and get covered in under 10 minutes. Depending on the information provided and any underwriting requirements, cover may be activated and approved immediately, with cover starting once your first premium has been received. Alternatively, you can request a callback from a 1Life consultant to guide you through your application.
Content disclaimer
This content was developed with the assistance of artificial intelligence (AI) technology and reviewed, edited and approved by 1Life's content specialists and subject matter experts prior to publication. The information provided is intended for general informational and educational purposes only and does not constitute financial advice or a recommendation to purchase any financial product. Any decision to purchase insurance should be based on your individual needs, financial circumstances and objectives. Benefits, premiums, exclusions, eligibility criteria, waiting periods, terms and conditions may apply and may change from time to time. Please consult the relevant policy documentation and disclosures for full details. 1Life is an authorised Financial Services Provider. Information provided is subject to applicable regulatory requirements under the Financial Advisory and Intermediary Services Act, 2002 (FAIS).