Good estate agents, says Bill Rawson, Chairman of Rawson Properties, tend to become involved in the planning of their clients futures '“ and this includes their future financial security.
'Any agent or bank employee who neglects to check whether a home buyer has adequate assurance to pay off a bond if the breadwinner in the family dies is in my opinion neglecting his duty,' said Rawson.
'I would certainly support legislation to make this type of insurance compulsory. Several times in my career I have seen families getting into financial difficulty after the death of a breadwinner because they had no cover on their bond'
The death of an income earner, said Rawson, is usually 'completely traumatic' for the surviving spouse '“ but the difficulties can be reduced if the survivor is assured of a home for life. If, on the other hand, the spouse finds that he or she has to sell their home, the pressure on him/her during what is already a very traumatic time becomes intense.
Rawson said that in most cases the monthly premium is calculated on the age of the mortgage holder at his next birthday and is not expensive.
'The monthly premium for death cover on a R570 000 bond for a 47-year-old can range between R350 and R450, depending on the service provider. Additional options (with an additional cost) include disability, retrenchment and dread disease cover'
Rawson warned that bond owners should read the exclusion clauses carefully, as these can vary considerably between companies. Companies coming in at a very cheap base rate might have large annual increases on the premiums as the insured person gets older.
'It is therefore important that clients obtain quotes from various companies before signing a contract,' said Rawson.
'Obtaining bond assurance, however, is a precaution worth taking, even if the breadwinner is already relatively well-insured. We are now advising our agents to be far more aggressive in promoting full insurance cover for clients in their own interest'
