Do you have credit insurance?  Are you even aware that it exists and how it works?  Much like health insurance, consumer credit insurance (CCI) is money put aside with the bank to cover your mortgage, should your financial situation change.

 

Perhaps you don’t think you need it, but what would happen if you no longer had the income to make good on your home loan repayments?  Sometimes unforeseen circumstances can hinder your ability to live on the same earnings to which you’ve become accustomed.

 

Unemployment, sickness, injury, or even fatality can take you and your family from a position of being financially comfortable to one of extreme difficulty in a flash.

 

So, credit insurance certainly sounds like a worthwhile investment – until you hear what the Australian Securities and Investment Commission (ASIC) has to say.  In its latest report, ASIC claims that “CCI products sold by eleven of Australia’s major banks are of poor value, and sold using harmful sales practices”.

 

ANZ, Australian Central Credit Union, Bank of Queensland, Bendigo and Adelaide Banks, Citigroup, CommBank, Credit Union Australia, Latitude Financial Australia and Latitude Personal Finance, NAB, Suncorp, and Westpac have all come under fire for offering “extremely poor” value for money.

 

The commission found that not only were sales staff using unfair sales tactics, consumers were also being incorrectly charged.  In addition to this, CCI was being sold despite borrowers’ ineligibility to claim under the policy.

 

While ASIC continues to investigate these findings, it may be some time before the banks are finally held accountable.

 

In the meantime, your mortgage is not going anywhere, and you could be at risk of paying for an inferior and financially damaging product or worse – facing the burden of accumulating debt without an insurance policy in place.

 

It truly makes sense to get rid of your home loan as soon as possible.  Give us a call – this is what we do.  Kick your mortgage out the door, and open a brand new window to freedom.