Buying, building or renovating a house or apartment can be a drain on your finances. No wonder many people turn to their bank for a loan. But did you know that - pension plan regulations permitting - you can use your supplementary pension benefits to help you achieve your homeowner dreams? There are several options to choose from, including taking out a cash advance.
Cash advance
Taking out a cash advance against your group insurance supplementary pension reserves is probably the best known example of how you can use your group insurance to purchase, build or renovate a home.
You use (a portion of) your accrued reserves to finance your investment. This way, you can already make the most of (a portion of) your supplementary pension benefits and don't have to wait until you officially retire.
More details on taking out a cash advance
Pledge
Pension plan regulations permitting, you can pledge your group insurance benefits at the bank where you took out your mortgage loan. Your group insurance will then serve as additional collateral for repayment of the loan. How does this help you come out ahead?
- You may be able to borrow more if the property isn't accepted as sufficient collateral, such as in the case of major renovation works.
- There are no mortgage registration fees or duties to pay.
While you won't be able to write off your interest payments, the benefit of this solution is that it's free of charge.
Alternative outstanding balance insurance
If your group insurance plan includes death benefit coverage, you may be allowed to apply the benefits as an alternative to outstanding balance insurance.
If you pass away before the end of your mortgage contract, the death benefit included in your group insurance will be paid to your financial institution to cover any outstanding balance instead of to your beneficiaries. Any remaining balance will, of course, be payable to the beneficiaries.
This means that you won't need to take out outstanding balance insurance for the portion of your mortgage loan covered by the death benefit.
Endowment mortgage
An endowment mortgage is an alternative to a traditional mortgage loan.
With this solution, you take out a mortgage loan on an interest-only basis. The principal is intended to be repaid by your group insurance supplementary pension benefits. In other words, you group insurance will be linked to a mortgage loan and used to repay the original amount of the loan that is owed.
Tip
The MyAG Employee Benefits app consolidates all of your employee benefits: supplementary pension, healthcare plan and income protection coverage. This way, you always have all information about your benefits at your fingertips!
Download the app from Google Play Store or the App Store and try it out straight away.