Is your home loan protected?
Buying a property is a big investment. It’s often one of the most important investments people make in their lives. When it comes to getting a mortgage, many buyers focus solely on the immediate steps they have to take and fail to consider the right protections.
What insurances can protect your home loan?
It pays to understand the insurance options you have available for your mortgage in order to protect yourself and your loan if you are unable to meet loan repayments.
First and foremost, you need to consider what would happen if unforeseeable circumstances impacted on on your ability to work and earn an income to pay your mortgage. We live in volatile times and it is important to consider financial, health and other risk factors beyond our control.
Income protection insurance
Income protection insurance pays part of your lost income if you’re unable to work because of a disability, caused by illness or injury. This insurance can pay up to 85% of your gross income if you’re unable to work due to partial or total disability. Each policy will have its own definition of disability and the level of cover provided will vary.
Life insurance, trauma and permanent disability insurance.
What we know and what we have witnessed is that life happens to everyone, some are just better prepared to deal with the circumstances. Life insurance and Trauma and permanent disability insurance are key to protecting you, your family and having a roof over your head.
Does the roof over your head depend on the viability of your business? Business insurance is something that may seem like an unnecessary expense in the short term, but is worth the cost now in case something terrible happens in the future. Despite your best efforts, you can’t foresee what sort of liabilities you may face in the future, and your ability to cover them with insurance may mean the difference between keeping and losing your company.
Talk to us so we can introduce to you our preferred advisors to ensure the right cover for you.
The number of insurances out there are endless. It is not logical to take out separate insurance policies for absolutely everything but we recommend you get advice on how to best protect your family, your interests and your home with the most appropriate insurances for your circumstances.
Other insurances such as Mortage Protection and Lenders Mortgage insurance may also be offered. We recommend always that you seek advice, don’t double up where you don’t need to, don’t under insure yourself and make sure you understand what is the best option for you.
Mortgage protection insurance
This insurance protects you if you’re no longer able to make loan repayments due to serious illness, injury or death. Each policy varies depending on the insurance provider but they generally offer trauma, death and terminal illness and special injury benefits, usually paid in a lump sum.
Lenders mortgage insurance
Often referred to as LMI, Lenders mortgage insurance is a one-off premium that’s payable if you want to buy a home, but your deposit is less than 20% of the value of the property. LMI protects the lender if you’re unable to repay your loan. This amount is added to your total home loan amount, which means you’ll pay more interest over the term of the loan. Paying extra interest is one of the main downsides of LMI, but it does help people enter the property market sooner.
Do you need insurance for your mortgage?
If you don’t invest in protecting yourself and your home loan, you could end up in a costly financial situation. Many people look at the extra costs as they start to add up but these far outweigh the risk of being unable to meet your financial obligations or support your family if you can’t repay your mortgage.
What’s right for you?
Many people have insurances attached to their superannuation or health insurance provider, so make sure to double-check the cover you already have before making any decisions. Check what the insured value and make sure this is enough to cover you, your family and your home.
Please reach out if you’d like to discuss the protection that’s right for your situation. Call 0864360900 or book an appointment online