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All in one mortgage protection cover launched

AIG Life has launched a new mortgage protection cover policy which offers consumers a range of mortgage-linked life insurance benefits, to gain premium savings over the term of their home loan.

Tuesday, July 1st 2008, 10:15PM
AIG Life chief executive David Pierce said the various options have been available from insurers before, and this new cover is all in one product.

"It seemed logical to us to offer more choice by combining all these options, to allow consumers and insurance consultants to choose what suits them best when protecting the mortgage, and to take advantage of the full potential cost savings."

The cover offers three major choices all in one package. The First-to-Die option means a couple no longer has to pay premiums for both to protect their mortgage. It ensures the mortgage is paid off when one dies, and the survivor then has the option to renew life cover with no underwriting.

The Decreasing Term Cover allows consumers to choose a fixed percentage that the mortgage protection cover will reduce each year, in line with the anticipated reduction in the mortgage value, which provides significant savings on premiums over the long term.

The Fixed Term Benefits option allows a policyholder to specify that the cover be terminated in line with the end of the mortgage, which generally provides for reduced premium amounts.

For example, with AIG Life's enhancements, a couple aged 37 and 40 with a $300,000 mortgage on a 25-year term now has a range of options:

  • To save from 2% to 7% annually with the First-to-Die option;
  • To save an additional 2-3% when selecting mortgage cover in line with the 25-year mortgage term, under the Fixed Term Benefits option;
  • To make a further premium saving with Decreasing Term Cover, reducing the level of cover as the mortgage reduces.
"If the policyholders choose the First-to-Die option and the Decreasing Term Cover option at a rate of 4%, under this new mortgage protection cover the total premium paid over the 25-year mortgage term will be $18,565, compared with $48,428 with a standard mortgage protection product," Pierce said.

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.19 4.05 4.05 4.49
ANZ Special - 3.55 3.55 3.99
ASB Bank 5.20 3.89 4.05 4.39
ASB Bank Special - 3.39 3.55 3.89
BNZ - Classic - 3.49 3.55 3.89
BNZ - Mortgage One 5.90 - - -
BNZ - Rapid Repay 5.35 - - -
BNZ - Std, FlyBuys 5.30 4.45 4.35 4.55
BNZ - TotalMoney 5.30 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 3.19 3.19 3.19
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 4.75 4.75 -
Credit Union North 6.45 - - -
Credit Union South 5.65 4.75 4.75 -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.80 4.95 -
HSBC Premier 5.24 3.54 3.54 3.69
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.15 3.18 3.18 3.20
Kainga Ora 5.18 3.97 4.05 4.39
Kiwibank ▼5.15 4.20 4.30 4.64
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - 3.45 3.55 3.89
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.25 4.15 -
Pepper Money Near Prime 5.64 - 5.44 5.44
Lender Flt 1yr 2yr 3yr
Pepper Money Prime 5.18 - 4.98 4.98
Pepper Money Specialist 7.59 - 7.39 7.39
Resimac 4.50 ▼4.45 3.89 3.94
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - 3.39 ▲3.55 3.89
Sovereign 5.30 3.89 4.05 4.39
Sovereign Special - 3.39 3.55 3.89
The Co-operative Bank - Owner Occ 5.15 3.49 3.59 3.89
The Co-operative Bank - Standard 5.15 3.99 4.09 4.39
TSB Bank 6.09 4.19 4.35 4.69
Lender Flt 1yr 2yr 3yr
TSB Special 5.29 3.39 3.55 3.89
Wairarapa Building Society ▼5.50 ▼3.95 ▼4.05 -
Westpac 5.34 4.15 4.09 4.49
Westpac - Offset 5.34 - - -
Westpac Special - 3.39 3.55 3.99
Median 5.34 3.97 4.05 4.39

Last updated: 21 January 2020 10:41am

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