Why you need loan protection insurance

By Leo Rodino posted on November 06, 2017

  • SHARE

Accidents happen. Bad things happen to good people. Times change. When life is cruising along nicely, it can be all too easy to forget these things.

So why do most of us insure our cars, our home and contents? We insure against our medical expenses, even our pets’ medical expenses. We protect ourselves against loss, from theft, natural disasters and unexpected medical and veterinary bills, but we don’t protect the biggest expense of all – our ability to make mortgage repayments.

For many Australians, home ownership is essential to both personal and financial security – and the monthly mortgage repayment is their largest regular expense. Getting behind with even one month’s repayment can lead to a whole lot of stress and spiralling debt… get several months behind and your lender can begin legal action to take possession of your home.

Lenders have financial hardship departments borrowers can liaise with to obtain a ‘payment holiday’ or to negotiate interest only payments for a set period, and banks will only foreclose as a last resort, however the stress of being in this position is, in itself, overwhelming. If you are out of a job, have suffered an accident, are ill or have just lost a partner the stress is likely to be unimaginable. It could only be a matter of months before you might need to sell your house quickly and possibly for less than its market value, adding further to the stress load at a time you and your family can least cope with it.

Loan Protection Insurance is designed to prevent this horrific scenario happening to you and your family. Answer the following questions honestly to see if Loan Protection Insurance is something you should consider:

  • Is your household reliant on a single income?
  • If you or your partner lost your job tomorrow, how long would you be able to cover the mortgage repayments?
  • If you or your partner could not work for a period of months, even years, due to illness or injury could your household manage financially?
  • What would happen should you or your partner die? Could the remaining partner continue repaying the mortgage on their own?
  • If any of the above should occur, would your family need to sell other assets or deplete savings in order to meet loan commitments?

Are your answers worrying? Then loan protection insurance may provide peace of mind. Depending on your insurer, level of cover and reason for your claim, loan protection insurance can cover your mortgage repayments for a set period, pay out a lump sum or help repay the outstanding loan balance up to your sum insured.

The good news is that getting yourself covered is easy with our Loan Protection Plan. There are no lengthy forms, the insurer pays benefits to you (and not the lender) to do with what you like, and unlike many other loan protection products, if you change lenders, you’re still protected (for the life of the policy). It’s that simple.

For more information regarding our loan protection insurance, get in touch with a member of our friendly team today.

Get the Right Advice

MoneyQuest Teneriffe is a comprehensive mortgage broking firm, providing commercial and residential property mortgage loans, business and franchising finance, SMSF loans, car and equipment finance and insurance.

 

  • SHARE

Disclaimer:

This article is written to provide a summary and general overview of the subject matter covered for your information only. Every effort has been made to ensure the information in the article is current, accurate and reliable. This article has been prepared without taking into account your objectives, personal circumstances, financial situation or needs. You should consider whether it is appropriate for your circumstances. You should seek your own independent legal, financial and taxation advice before acting or relying on any of the content contained in the articles and review any relevant Product Disclosure Statement (PDS), Terms and Conditions (T&C) or Financial Services Guide (FSG).

Please consult your financial advisor, solicitor or accountant before acting on information contained in this publication.

Proudly Part Of

The Money Quest Group (MQG) is one of Australia's leading boutique mortgage broking businesses, with a network of more than 600 brokers nationwide. Known for their exuberant culture and superior support, MQG provides brokers access to a range of financial products from more than 60 lending institutions and suppliers, and exclusive access to in-house benefits and services.

© 2017-2024 MoneyQuest Australia Pty Ltd, Australian Credit Licence 487823

1300 886 100