The home 🏠 loan insurance environment is often misunderstood, and in many cases not budgeted for in terms of monthly affordability. In most cases, particularly for first-time home buyers, it’s an unknown and it’s not until a sale agreement is well underway that there is a sudden mad scramble to rework finances because the home loan itself requires a form of insurance as a security.
Essentially there are two different types of home-loan insurances; a Bond Protector and a Buildings Protector.
The Bond Protector is a long-term insurance credit life policy, meaning that it covers a specific debt,in this case , the home loan. This policy is usually ceded to the financial institution where the bond resides, and unlike the more traditional Life cover insurance, Bond Protector is designed specifically to pay the outstanding bond in the event of death, dread disease, loss-of -income, or permanent disability of bond-holder.
Buildings Protector Policy:
A buildings Protector policy covers the building, the immovable structures, inclusive of outbuildings, and their fixtures, fittings and improvements. This type of policy is also known as homeowner’s insurance and is compulsory for obvious reasons, such as if the he is destroyed by fire, or by a force of nature. It is not just to protect the home loan financer either ,the homeowner is protected should such a catastrophe occur.
