Big banks in life insurance rip-off
The big four banks have been caught out charging their customers two to three times the market rate for standard life insurance, which they sell as a package deal with mortgages. Bank mortgage customers are often sold life insurance at the bank branch level as a package deal with their loan. Many first home buyers are told by their bank they need life insurance and they can package it up with their loan and get a good deal.
“While the four big banks are notorious for gouging on interest rates, they are also overcharging on mortgage protection insurance policies offered to customers who take out a loan,” said Chris Eade, managing director of Lifebroker. “For example,” said Eade, “one big bank markets a life product as ‘easy’ and packages it with a mortgage.
The big four bank life insurance policy that Chris Eade is talking about charges a non-smoking 40 year old male with that typical mortgage of $300,000 and a wage of $75,000, an exorbitantly high $212.39 per month for the privilege of packaging their life and mortgage together.
“That compares to a market rate among the twelve top non-bank insurers of about seventy to eighty dollars or even a bit less,” said Eade. “That’s a scary thought for the thousands of Australians who were sold insurance with their home loan and never took the time to compare their options.”
Source: Courier Mail