Is insurance a requirement on home loans and is my premium to high?

[Millian]

Hi,

 

In the process of buying a house and UOB bank have stated that I need home loan insurance.

 

They have given me a quote from themselves which is though Prudential.

 

Here is the premium:

 

Total  premium amount: 553,865

First 2 years: ฿2,350 

3rd year: ฿3,380 

4th - 12th years: ฿3,660 

I asked them if this is a requirement to which they said yes.  I can understand that as likely based on the risk factor. Foreigner, low down payment, etc.

I asked them if I can get my won home loan insurance from a different provider, to which they said no.  However I'm wondering if that just sales talk and I'm within my rights to get my own cover?

Does anyone have recent experience with this, or know the answer?

 

Had a search though the forums, seen some related posts, but its unclear if I have to get it through the provider, or even need it all.

[4MyEgo]

13 minutes ago, Millian said:

Had a search though the forums, seen some related posts, but its unclear if I have to get it through the provider, or even need it all.

As far as I know, all lenders will require home loan insurance annually when giving a loan, that said, the only way you will find out if you are required to take out insurance through the lenders choice is to read the home loan policy.

 

Banks keeping insurance in house tends to make them feel more comfortable with this as they can tell if the property they are lending against is insured, meaning if it burns down to the ground, they can get their money back easier if they had to sell up.

 

The insurance amount doesn't sound excessive, I have 2 mil insurance and pay something like 6,500 baht per annum. 

[Millian]

Thanks the input, but I wasn't clear enough with the premium details, it's per month, not per year.


Total Home loan amount: 7,767,000
 

Total  insurance premium amount: 553,865
 

First 2 years: ฿2,350 per month

3rd year: ฿3,380 per month

4th - 12th years: ฿3,660  per month

Edited September 28, 2022 by Millian

[Etaoin Shrdlu]

Prudential is a life insurance company, so the coverage is life insurance on you, not property insurance on your home. 

 

I think it is common for banks to require this, but I do not have personal experience. Banks may also require property insurance on the home, but it is often limited to fire and related perils only, making it fairly inexpensive.

 

UOB and Prudential most certainly have an agreement to work together and have agreed policy wording for the claims payment clause which would pay the bank first for the amount of any outstanding loan. There will also be communication protocols between UOB and Prudential in the event of non-payment of premium. The bank won't want to have to negotiate these items with another insurer on a one-off basis. 

 

The premium levels for the life policy are influenced by your age during the tenor of the loan making direct comparison with others more difficult.

 

Good luck.

 

 

[Bangkokhatter]

It was made clear to me by Bangkok Bank no insurance no loan, and it had to be their insurance.

Mine is considerably less than yours but then so was the loan and as mentioned above age will be factored in also.

[BritManToo]

My woman had to buy 20 years life insurance paid up front 30kbht plus buildings insurance 2k5bht/year. Scb. 

 

Your premiums seem way too high! 

Edited September 28, 2022 by BritManToo