Protection for your mortgage

2013-10-27 14:00

Make sure you are not being billed twice for life assurance, writes Neesa Moodley-Isaacs

Mjezu writes:

Iam a 40-year-old man. In 2010, I bought a house with bond finance from FNB. The purchase price for the house was R370?000 and I signed for a monthly premium of R3?880, but was surprised when I discovered that I was paying R4?900. This figure was later reduced to R4?600.

I discovered that FNB was actually billing me for life assurance despite the fact that I have a life assurance policy with Nedlife, which is independent of my home loan.

Is this an acceptable practice, or is FNB simply exploiting my ignorance as a first-time homeowner?

Marius Marais, Chief executive of FNB Housing Finance, replies:

We can confirm that Mjezu did sign and accept FNB life mortgage-protection cover, which is included in his monthly instalments.

He was informed that the insurance cover was a condition of the bond agreement. But if he submits a copy of his independent insurance policy, which adheres to the necessary conditions, we will be able to cancel the life mortgage protection.

City Press replies:

When you take out a home loan, you are entitled to mortgage-protection cover with any financial institution of your choice. However, this must be made clear to the bank that you are talking to about the home loan.

You will also be required to provide full details of the insurance policy to the bank that holds your home loan.

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