AMP has launched a mortgage repayment insurance product that provides customers the assurance that no matter what happens, they will be able to pay off their home loan.
AMP expects demand for its Home Loan Cover from first-time buyers, as they are less likely to own any life insurance and typically have low equity in their new homes. Self employed people and homeowners with young families have also shown interest in the product.
"We’ve found that people are willing to spend, say, an additional $50 a month to ensure peace of mind on their loan," AMP product specialist Brendan Ives says.
"Providing insurance cover for a home loan is important for the client and adds a long-term product to the client/adviser relationship."
Ives says AMP’s new risk product takes a wider, more flexible view than the traditional home-loan repayment cover. Cover can be purchased for up to twice the value of the loan, payable on death of the policy owner. Loan repayment cover can also be taken against redundancy, bankruptcy or temporary total disablement through illness or injury.
The cover amount is not tied to the home loan, and does not reduce as the outstanding loan reduces. Instead the life cover remains suitable for other purposes. (Alternatively, the customer can opt to reduce their cover during the life of the loan.) This means that if you shift house, change lenders or even pay off your loan, your life cover doesn’t have to stop.
The application process is also simple. There are eight standard questions on the life cover and three each for the additional rider benefits covering bankruptcy, redundancy and disablement.
And because there is no policy fee, customers are not disadvantaged by taking a small amount of cover.
AMP has launched a mortgage repayment insurance product that provides customers the assurance that no matter what happens, they will be able to pay off their home loan.