RetireJapan

Danshin hoken in Japan, when someone borrows from a bank for a house, can be an alternate form of term life insurance of some value. What do you think, either for or against.

Like any other financial instrument, you have to assess the cost against what is available in the market.
Some banks will ask you to be mandatory to have it included in your loan contract. Then you have to cancel your separate contract with another insurance company if you have already subscribed to one. You do not need to pay twice for the same coverage.

If it is not mandatory, you have to compare the cost each month between having it with your bank loan or with a third party insurance company. Maybe it is cheaper with a separate insurance broker. If you subscribe it with your loan, it is not possible to cancel it.

Also, the banks will suggest you several type of insurance coverage: against death, cancer, 8 most common diseases, loss of job. These are the major ones I have seen. For each coverage, your interest rate will increased by some percentage 0.1% for instance. Again it is up to each one to decide which insurance is useful depending if you are risk adverse or not. In any case, it will not give you back your life if you become sick or have an accident, it will just cancel the obligation to pay the remaining of the loan.

My personal opinion is that coverage against death is a must. Everything else is just a way for the banks to make money. I prefer to keep the money, invest it somewhere else and if something happens to me I can use the money to cover medical expenses or it will go to my family in the worst scenario.

I got free insurance with my loan (not sure why, perhaps it was because I was -just- under 40). If I die, or get cancer (any kind of cancer?) the loan gets cancelled.