It has become apparent that some banks are recommending their own Loan protection, Life insurance and Income Protection products during a home loan application stage, at settlement or over the term of the loan.
It is strongly recommended to NOT accept these contracts without first conducting your own research by requesting comparative quotes / independent advice to ensure what you have been quoted is suitable to your own personal goals and objectives.
“I am been very impressed with the enquiries from the general public tendering out quotes – seeking advice and taking control of their own finances, researching this ‘must-have’ insurance. Either to review their existing policy or seeking new ones, these are smart people who will save $1,000s over time’. says Matthew
John & Lorraine – Case Study example
OUTCOME
As a result of advice, John and Lorraine now have adequate and comprehensive insurance cover, they have halved their insurance cost further can now claim a tax deduction on the new reduced premium.
BACKGROUND
John and Lorraine had their finance approved for their new home which settled in February this year with ABC Bank ltd (Name Changed).
Two days later they received paper-work from the insurer including quotations for Life/Loan protection and accident insurance also home & contents now that they needed cover in this regard. ABC Bank ltd had provided John and Lorraine with quotes through ABC Insurance ltd – (sister company and insurance underwriter of ABC Bank ltd!) The annual premium quoted = $3,000 annually.
Lorraine decided to get a second opinion by placing a call to an independent financial advisor just to check these products and premiums were competitive compared to all the other insurers: Upon my research I identified the following:
1. The same cover elsewhere was half the price and now fully tax-deductible
2. John and Lorraine and their family would still be struggling financially through sickness, illness or death based on the sums insured quoted –
3. CBA had merely provided cover to protect their own financial interest NOT John, Lorraine or their immediately family.
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