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Why Bond Insurance is Important in South Africa

The Phoenix Bonds team is a group of expert, professional, independent bond originators in South Africa who have come together to help you get your bond approved. Not only do we help you throughout the entire application process, but we also help you get the best possible deal on your home loan.

We are fluent in all things bond related and in an effort to help you understand the world of bond applications, we are going to share why it’s important for any homeowner to acquire bond insurance.

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Bond Insurance in South Africa – Is it Necessary?

In our previous articles, we discussed building insurance in South Africa, why it’s compulsory, and why it’s something every homeowner needs. While building insurance is required in order to obtain a home loan and covers structural damage to the building itself, bond insurance covers the home loan itself.

Although bond insurance is not compulsory, it can be considered very necessary. We know that there are many costs that come with owning a home and “yet another insurance” is possibly the last thing you want to consider.

Therefore, we have endeavored to answer some important questions around bond insurance in South Africa and, hopefully, we can provide some clarity on the matter.

What is Bond Insurance?

Bond insurance can be likened to life insurance as it covers you in the event of death, dread disease, or permanent disability. The difference is that bond insurance pays out specifically to cover your outstanding bond payments when you are no longer able to. If you experience temporary loss of income or disability, your bond insurance will be paid for a period of time, or until you are able to continue working and earning an income.

Is Bond Insurance Compulsory?

As we mentioned before, bond insurance is not compulsory, making it a completely voluntary decision for homeowners. However, with certain FNB clients or affordable housing awardees, bond insurance is compulsory.

Do I Need Bond Insurance?

Like with other insurance products, bond insurance gives you peace of mind knowing that if something were to happen to you, rendering you incapable of paying your bond, that your family will not be faced with this extra expense, or the fear of losing your home due to lack of payment.

Who Handles the Payment if I Can’t?

Most bond insurance providers will arrange that the bond payments are handled by them or a trusted third party and gets paid directly into your home loan account. Therefore, you won’t need to worry about nominating someone to manage your home loan account if you are suddenly unable to do it yourself.

Phoenix Bonds – Independent Bond Originators in South Africa

Our bond originators believe that bond insurance is something that every homeowner should consider. If you would like more information on bond insurance or to find out more about our bond origination services, contact us.

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