Absa Secures Insurance Cover for Home Owners with AIDS

March 26 - Absa, one of the country's largest retail banks, has launched a unique service for HIV positive customers.

The group has managed to source a controversial new insurance cover that will essentially allow the homeowner to skip mortgage payments if they become ill.

The new service is part of the My Home loan brand that brings comfortable lending conditions to low income customers.

The new insurance product will be available to homeowners where the household brings in less than R15,000 a month.

The Managing Executive of Absa Home Loans, Luthando Vutula said: "Mortgage payments will be covered by insurance until you get better".

The venture was possible thanks to a partnership with third parties who would also provide testing and treatment programs, as well as voluntary counselling.

Cynics have called Absa's new product "slick PR" and an analyst for Old Mutual said that "pricing would have to take into account that your customer can't pay a deposit and are more risky."

However, the group said that it would not be charging higher interest rates for these special customers, arguing instead that "other institutions, some international, have to be part and parcel of this."

Absa's new My Home product covers up to 110% of the home loan and does not require that potential homeowners put down a deposit.

3/26/2010 10:49:14 AM