Buying a Home? Don't Forget These Insurance Steps

Buying a home is a major financial commitment, and the insurance decisions around it are often rushed through as paperwork during the loan process rather than properly evaluated — which can mean paying for cover you didn't need, or missing cover you did.

What to check

• Home loan protection / credit life insurance is often offered (sometimes strongly pushed) by the lender — compare its cost against simply increasing your independent term insurance cover to include the loan amount.
• Home insurance (structure cover) is separate from home loan protection — it protects the physical property against fire, flood and other damage, and is worth having regardless of loan protection.
• If you're insuring contents too, do it based on replacement value of your furniture and electronics, not an arbitrary round number.
• Check whether your existing term insurance cover already accounts for this new loan, or whether it needs to be topped up.

A common bundling trap

Banks frequently bundle a single-premium home loan protection plan into the loan amount itself, which means you pay interest on the insurance premium for the life of the loan. Comparing this cost against a standalone term insurance top-up (covering the same loan amount, bought independently) often reveals the bundled option is meaningfully more expensive over time.

Frequently asked questions