SYDNEY, Australia – Commonwealth Bank of Australia (CBA) unveiled a new protection plan created specifically for homeowners.
The CBA has launched the Home Loan Compassionate Care (HLCC), the newest complementary protection plan designed to help owner-occupied homeowners.
The new insurance product offed by CommBank is available for all qualified home loan customers for occupied properties. The HLCC insurance will offer customers repayments for one year or 12 months in any case that occurs, such as terminal illness or death of the loan customer, spouse, or a dependant.
The Home Loan Compassionate Care is designed to offer CommBank loan customers aid whenever someone in the family passes away or is diagnosed with a terminal illness. It offers support towards existing home loans whenever such unfortunate events happen.
The HLCC insurance is provided by CommBank together with the AIA group, and it is the first of such offering available to Australians. Based on the details published at the CommBank official website, the HLCC insurance product comes at no additional cost to their loan customers. There is also no required sign up or activation process to avail of the insurance product. The bank has provided a detailed claim process for its HLCC insurance on their official website. The requirement to get the HLCC benefit includes completing a form and submitting relevant supporting documents in person to any local CommBank branch or by mailing them to the published address of their processing service.
The HLCC insurance package is available for both new and existing home loan customers of the owner-occupied properties of CommBank. One’s eligibility comes regardless of whether the home loan was taken directly from CommBank or through a broker.
The eligible age to avail the insurance product is between 18 to 59 years old for both the borrower and the spouse. For the dependant, to be eligible to receive HLCC benefit, one has to be aged 18 years old or below.
The eligibility of a home loan to receive the HLCC benefits can either be fully or partially funded, or CommBank branded. The owner-occupied home loan can also either be standard Variable Rate Home Loan, Extra Home Loan, or a Fixed Rate Home Loan.
CommBank’s HLCC offer came in effect today, February 24, 2020. And based on the details from the bank’s official website, only claims events that happen on or after the effective date of the insurance package are eligible.
The insurance offer comes with a $12,000 cap applied for every insured person for all eligible home loans.
Meanwhile, based on CommBank info about the insurance package, the HLCC is not offered to investment home loans, staff housing loans, Commonwealth portfolio loans, equity unlock for seniors, Viridian line of credit, loans created for business purposes, trusts, or for organizations, non-CommBank branded home loans, and any other loans that have either been closed, sold, discharged, or written off.
With the announcement of launching the plan for the new insurance product for homeowners, CommBank cited studies and research.
Based on the research, according to CommBank, in any case, that death or a diagnosis of a terminal illness happens within the household, only one-third of the population in Australia can continue paying their existing loans. The finding is based on the capacity of loan customers to continue with their repayments for six months.
The same research also showed that based on the loan customer’s income and savings, only one in ten homeowners would be able to continue with repaying their existing mortgage for a month or even less.
Angus Sullivan, the retail banking services group executive of CommBank, said that they know that for a lot of homeowners in the country, one of the biggest financial commitments is their mortgage repayments. Mr. Sullivan also stated that whenever an unthinkable event happens inside the household, CommBank wants to offer support to their home loan customer whenever they can. Through the HLCC insurance package, he said that they would have the capacity to support new and existing customers when it comes to repaying their existing home loans for a total of 12 months without any extra costs.
The same research cited by CommBank has also shown that around one-third of the respondents didn’t have full knowledge about the details of their current home loans. The study also unveiled that such behavior is more pronounced for female Australians than in male homeowners.
Mr. Sullivan further explained that whenever something unthinkable were to happen to the loan customer or anyone in the household, the last thing that someone should be doing is to worry about where to get the money for continuing with their home loan repayments.
He also added that with the convenience that the HLCC protection offers to owner-occupied home loan customers, they have also designed the insurance package as easy and convenient to claim the benefits without any sign-up or activation needed.
To offer the best product to their home loan customers, Mr. Sullivan explained that they had made consultations with CommBank employees who have experienced the same things previously. They made efforts to know about the difficult experiences related to the insurance claim process to make sure they created the end-to-end claim process for the HLCC as easy and stress-free for their customers as possible, he said.
Mr. Sullivan also said that the bank had entrusted a dedicated team to undergo specialized training to help carry out these critical and sensitive matters.
Further, the research cited by the bank as the reason for their new HLCC insurance offer has also uncovered that almost 45% of the respondents are in dire need of financial support when it comes to repaying their mortgage loans.
The number of respondents requiring support for loan repayments has also gone up to nearly 55% if the homeowners have children aged 18 and below. The number has also moved up to around 67% for homeowners who are aged under 30 years old.
The research also uncovered that there are two-fifths of the respondents needing financial support were open to looking for assistance from their family members and friend to help cover their loan repayments.
Aside from the new HLCC insurance package, CommBank also provides a wide array of banking services and products from personal loans, business loans, credit cards, and savings accounts, among others.