Bank to introduce new insurance for customers with loans

Business

LOAN customers with Bank South Pacific will be able to get insured by January next year, according to chief executive Robin Fleming.
Fleming said that this was the bank’s initiative to cater for its customers in the case of death and their families in terms of loan repayment obligations. He said the Bank of Papua New Guinea had approved in principle the setting up of BSP Life PNG Limited.
“Our target is for next January,” Fleming said.
“It will be a simple product initially, one which will be risk-based so that anyone who has a personal loan with Bank South Pacific, in the unfortunate event that they pass away, there will be an insurance attached to that personal loan policy so that their dependents and immediate family do not have to worry about that loan because it will be repaid from an added feature in our product,” he said.
“We are not going to charge our retail personal loan customers anymore for that feature as it will be a cost that we absorb within Bank South Pacific.
“That will be the first product that will be risk-based. Anyone with an unsecured personal loan in the unfortunate event that they pass away, their loan will be covered by the insurance plus a small contribution towards some of the funeral expenses of about K500 or K1000.”