ALL ABOUT HOME LOANS brought to you by Bank One
THE THREE MAIN CATEGORIES OF INSURANCE RELEVANT TO OWNING PROPERTY :
Offers protection in the unfortunate event that the home loan recipient is unable to make the monthly loan repayments because of death , permanent disability , or long-term illness .
Effectively transfers the debt to the insurer , and not the estate / heirs .
1 . Life Insurance
Is mandatory for home loans provided by Bank One .
A policy with a DTA , or “ Decreasing Term Assurance ”, feature allows for the decrease of the benefit on a monthly or annual basis , and usually the size of the policy also decreases until the coverage period concludes or until the policy pays out .
Life endowment : while a policy which combines a DTA and an investment feature may be more expensive , the borrower will benefit from a lump sum at the end of the repayment period .
2 . Household Insurance
Covers the risk of damage to the contents of a property as a result of natural disasters such as floods , cyclones , or fire , as well as those arising from burglary or vandalism .
3 . Buildings Insurance
Designed to provide financial protection for damage specifically to the structure of your home , such as the walls , roof , and floors . It usually covers damage to fixtures and fittings too .
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