Life is unpredictable — and that's why Bond Protection Cover exists.

Investing in this type of insurance gives you and your loved ones the security of knowing that you'll be able to retain the ownership of your home if you're unable to make your home loan repayments. 

It's a product offered by insurers that: 

• Settles your outstanding home loan balance in the event of death or permanent occupational disability; or
• Pays the home loan instalments on your behalf in the event of loss of income, such as retrenchment or temporary occupational disability.

Your home loan provider may require you to take out Bond Protection Cover as a condition of financing your home loan. Even if it doesn't, you still have the option of taking out this type of policy for your own peace of mind.

In fact, anyone that is registered on the bond can take it out to provide protection for their dependents and/or the other bond holders.

You usually don't have to undergo medical examinations to qualify for Bond Protection Cover, but there will be exclusions on the policy. 

The policy premium is generally calculated taking into account your age, the bond amount, the term of the bond, the benefits included in the policy and, in some instances, your gender, occupation type and smoker status. 

Keep in mind, however, that should something happen, the proceeds of the policy will not be paid to you, but rather to your home loan provider.

The benefits offered by Bond Protection Cover may differ from insurer to insurer, so it's wise to compare the options. When doing so, make sure to ask the insurer about the terms and conditions so that you know what is expected of both them and you.

You should ensure that you receive a policy document within a reasonable period after accepting a policy. Read through this document carefully; if there's anything you don't understand, contact the insurer and ask them to explain it again.

This article was paid for by SA Home Loans.