Many Australians may not have adequate income or mortgage protection insurance cover in place to service their home loan repayments and living expenses in the event they lose their job, or suffer a serious illness or injury that would make them unable to work. In fact, while most of us have car insurance, it’s been estimated that only 6% of us have our own income adequately covered!
As your mortgage broker, we adhere to certain ethical lending practices that are required by law. One of these requirements is to do our best to ensure you suffer no hardship when it comes to repaying your home loan. That’s why we always discuss your insurance arrangements with you when you apply for a home loan through us.
What is income protection insurance?
There are several different types of insurance that you could use to cover your home loan repayments in the event you were unable to earn an income. One option that our home loan customers take out is income protection insurance. We can help you to choose a policy that’s tailored to your particular needs and protects you in a variety of different ways, including:
- Extended illness
- Involuntary unemployment
- Kids injuries
- Holiday injuries
- Permanent disability
There are several different types of insurance that you could use to cover your home loan repayments in the event you were unable to earn an income. The cost of income protection insurance is usually tax deductible for most people (you’ll need to check with a qualified tax adviser to see if this is the case for you). However, not all insurance policies are tax deductible.
Other types of insurance policies that you could use include:
- Loan or mortgage protection insurance
- Life insurance/total and permanent disability insurance
Why should you get insurance cover?
Taking out a home loan can be an expensive exercise, there’s the deposit, application fees, inspections, conveyancer – the list goes on. Income or mortgage protection insurance can just seem like an additional expense that you can choose to avoid. But what you need to consider is: can you afford not to have it?
If you couldn’t work for six months, how would you support yourself and your family? Would your savings be enough to cover your home loan repayments for an extended period of time, or would you be at risk of losing your home?
You may think that nothing will happen to you that may cause a significant interruption to your capacity to earn an income, but consider these facts:
- More than 50,000 people are hospitalised every year due to transport accidents. 81% of these people are working age and need to spend more than 5 days in hospital. ii
- 126,800 new cases of cancer will be diagnosed in Australia this year. iii
- At the end of 2014, more than 150,000 Australians were unemployed for six months or more. iv
As you can see, there are plenty of events in life that could affect your capacity to earn a regular income. Planning for the unexpected could be very important to your well-being, your family and your financial future!
Getting your protection organised
We can help you find an income protection policy that provides the level of cover you need according to your personal situation and financial circumstances. Getting it organised could be as easy as giving us a call.
So don’t spend another moment worrying about what the future may bring – if you need to arrange insurance cover or want to check if your cover is adequate, please give us a call today. We’re here to help you decide exactly what insurance you need and help you find the cover to suit.