Commonwealth Bank of Australia (CBA) has launched Home Loan Compassionate Care (HLCC), a complimentary protection plan for owner-occupied homeowners.
The insurance product is available for eligible owner-occupied home loan customers aged between 18 and 59 years.
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The insurance will offer repayments for 12 months in the event of death or terminal illness of self, spouse or a dependant.
In announcing the launch of the new plan, CBA cited research.
The research found that in the case of death or terminal illness, only one-third of Australians would be able to repay their loans for up to six months.
It has also been revealed that based on their savings and income, one in 10 homeowners would be able to make mortgage repayments for a month or less.
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By GlobalDataCBA retail banking services group executive Angus Sullivan said: “We know that mortgage repayments are the single biggest financial commitment for Australian homeowners, so when the unthinkable happens we’ll support our customers by making their home loan repayments for around 12 months at no cost.”
The research further unveiled that nearly one-third of the respondents are not fully aware of the details about their home loans. The behaviour is said to be more pronounced in women than in men.
Sullivan added: “If something were to happen, the last thing you should have to worry about is your home loan.
“In designing this protection, we’ve made sure there’s no need to sign up or to activate it.
“We’ve also consulted with our own employees who have gone through similar, difficult experiences to ensure the end-to-end claims process is as easy and stress-free as possible, and a dedicated team has undergone specialised training to handle these sensitive matters.”
Besides, the research uncovered that nearly 45% of the respondents require financial support to repay mortgage loans.
This number moves up to 55% if homeowners have children under the age of 18, and up to 67% if homeowners are aged below 30.
Of the respondents requiring financial support, two-fifths were open to seeking the assistance of family or friends to cover their mortgage repayments.
