People often start thinking about personal risk insurances – life, trauma, total permanent disablement, mortgage and income cover – when they buy their first home. This makes sense as those without dependents or large debt can get by a bit easier if an illness or injury stops them working for an extended period of time. However, once you buy a home there’s no taking a break from your mortgage!

Funnily enough, this is also when the bank who kindly gave you a mortgage is likely to ask if you have life insurance, or income cover, to protect that mortgage. Here are some things to keep in mind when considering taking out insurance through your bank:

1. Banks are not impartial.
   In New Zealand, banks are either aligned with specific insurance companies or carry their own insurance policies. Which means your options are limited. How do you know their option is the best for you?
2. Bank products aren’t necessarily the best products.
   Some people develop a relationship with their bank throughout the mortgage application process. Who doesn’t like a company that is willing to lend them several-hundred thousand dollars? But this doesn’t mean that they’re able to offer you the best insurance options on the market.
3. Banks focus on insuring your mortgage.
   Several clients have come to us after being offered bank insurance because they found the bank didn’t consider the other aspects of their lives which they’d need money for if they were unable to work, e.g. supporting their children. Most banks’ primary concern is insuring your mortgage. Insurance advisers are trained to assess your full life situation and make recommendations on more than just your current level of debt.

What is the value of having and using an adviser?

Your situation is unique and you have your own values. With an adviser you’ll get someone who is trained and qualified to give personal insurance advice and who has access to a range of products from various insurance companies. An adviser will also review your insurance on a yearly basis, or more frequently if need be, to make sure everything is up to date and is still suited to you.

Most importantly, you’ll get help at claim time, when people usually need it the most.

If you’d like to find out more, give us a call on 0800 222 511 or email us at risk@grouphealthandlife.co.nz