Getting life insurance through your bank is a mistake that can cost you dearly. Here’s what the banks don’t want you to know.
A significant percentage of life insurance policies in Australia are tied to mortgage loans—almost 4 million policies. However, according to Laura Palazon, director of “The Consumer Voice,” it’s not a good idea to purchase life insurance through a bank.
Generally, life insurance from a bank is almost twice as expensive as what you would pay with other companies. Considering that mortgages and life insurance are long-term commitments, it makes more sense to get your life insurance directly from an insurance company.
What If They Link It to the Loan’s Interest Rates?
Despite popular belief, a new law protects consumers, and a bank can never force you to get insurance through them. According to Palazon, in almost 90% of cases where the insurance is linked to the loan’s interest rate, the customer ends up paying more due to a lack of knowledge.
