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Life tends to be unpredictable, and it is for such moments that the insurance industry exists. Taking out “Bond Protection Cover” gives you the security of maintaining ownership of your home, in the event that you are unable to continue to meet your home loan repayment obligations.
Bond Protection Cover is a product offered by an insurer, that:
- Settles your outstanding home loan balance in the event of death or permanent occupational disability, or
- Pays the home loan instalments on your behalf in the event of loss of income, such as retrenchment or temporary occupational disability.
Your home loan provider may require you to take out Bond Protection Cover as a condition of providing the financing for your home loan. If your home loan provider does not make this a condition of your home loan, you still have the option of taking out the cover to protect your home ownership. Make sure to ask about the terms and conditions of the cover and that you understand what is expected of you and them, as the benefits, terms and conditions of Bond Protection Cover may differ from insurer to insurer.
With Bond Protection Cover you usually would not have to undergo medical examinations, but there will be exclusions on the policy. The proceeds of the policy are paid to the home loan provider. If you take out a non-Bond Protection Cover policy type the insurer will, request you to disclose your medical history and based on the information provided, decide the requirement of medicals and tests prior to considering you for the policy. If life cover is a condition of your home loan and you take out a non-Bond Protection Cover type policy, you would have to sign over your rights in terms of the policy to the home loan provider.
Everyone that is registered on the bond can take out Bond Protection Cover to provide protection for their dependents and the other bond holders. The policy premium is generally calculated taking into account your age, the bond amount, the term of the bond, the benefits included in the policy and in some instances your gender, occupation type and smoker status.
You should ensure that you receive a policy document within a reasonable period after accepting the policy and read through the document carefully. Contact the insurer if there is anything that you don’t understand and ask them to explain it again.
This article is intended to provide general information of an educational nature only and is not intended as financial advice.
If you have a complaint against your insurer, you should first contact your insurer to try and resolve the problem. If the problem is not resolved, you may submit a complaint to the Ombudsman, who will be able to provide you with free, efficient and fair dispute resolution.
THE OMBUDSMAN FOR LONG TERM INSURANCE
Private Bag X45, Claremont, 7735
021 657 5000
0860 103 236 (Sharecall)
info@ombud.co.za
FAIS OMBUDSMAN
PO Box 74571, Lynnwood Ridge, 0040
012 762 5000
086 066 3247 (Sharecall)
info@faisombud.co.za
This post and content is sponsored, written and provided by SA Home Loans.
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