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How taking out the right life insurance policies can help cover a mortgage
The great Australian dream of owning your own home is still very much at the forefront of many people’s minds. It’s no secret that to fulfil this dream though, it takes hard work and lots of determination. After all, property is a very large investment. Some say it’s the largest and most important asset you’ll ever own.
What happens, then, if you suffer from a health complication? Would you be able to cover the mortgage repayments?
There are a range of benefits supplied by the government for people unable to work due to ill health, injury or disability, and many Australians turn to the government for help.
Whether it’s because you’ve been involved in a car accident or you need time off to recover from a serious illness, the fact of the matter is that government income support is unlikely to stretch so far that it covers your mortgage.
For those who have taken out life insurance and income protection insurance, paying your mortgage repayments, despite any injuries or illnesses, can seem a little less stressful.
How can life insurance help cover my mortgage?
Taking out life insurance can help provide peace of mind should the unthinkable happen to you. Having a plan for how your family would manage financially if you were gone is a very important conversation to have with your loved ones, especially when it comes to ongoing living expenses. The mortgage is one of the biggest monthly expenses for Australians, paying it, quite literally puts a roof over your head.
An AAMI Comprehensive Life Insurance policy provides cover of up to $1.5 million for death or terminal illness, with up to $10,000 as an advance payment upon your passing. There’s also an option for major illness cover which can provide financial help should you be diagnosed with a critical illness such as cancer, stroke or if you suffer a heart attack.
How can income protection help cover my mortgage?
Another option to explore is income protection, which can provide an alternative source of income if you’re temporarily unable to work due to injury or illness. Whether it’s because you’ve injured your back, fallen ill or broken your leg in an accident, if you can’t work, income protection can help replace some of the money you would have had coming in.
AAMI’s Income protection insurance covers up to 75% of your average income over the past 12 months, up to $10,000 which can help you and your family stay on top of your bills during your recovery. Whether it’s credit card repayments, childcare fees or basics like groceries or petrol, income protection can take a lot of the stress off your financial shoulders, including how to stay on top of your mortgage repayments.
When you’re injured or ill, ultimately what you want and need to focus on is your recovery and health. A monthly payment for a nominated period of time can help you keep your household running and provide for your loved ones while you focus on getting better.
Caring for your home
An unexpected illness or injury usually requires time off work to recover. At times, this may extend beyond your accrued compassionate leave days, meaning your income may fall short of what’s needed for your family.
On top of this, in the case of your passing, life insurance can assist your loved ones to cover the mortgage repayments until they, at least, get back on their feet, emotionally, mentally and financially.
Consider this: according to estimates by ComCare, in one year alone, 786,000 people were unable to work due to ill health, injury or disability. If you’re one of those people, how will you keep paying your mortgage?
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AAMI Life Insurance products, other than in some circumstances the Redundancy Benefit, is provided by TAL Life Limited ABN 70 050 109 450 AFSL 237848 (TAL Life) which is part of the TAL Dai-ichi Life Australia Pty Limited ABN 97 150 070 483 group of companies (TAL). TAL is not part of the Suncorp Group. TAL uses the AAMI brand under licence from the Suncorp Group. Any advice on this page in connection with the Life products is general in nature and is provided by Platform Ventures Pty Ltd ABN 35 626 745 177 AFS Representative Number 001266101 (PV). PV is part of the Suncorp Group and an authorised representative of TAL Direct Pty Limited ABN 39 084 666 017 AFSL 243260 (TAL Direct). General advice does not take into account your individual needs, objectives or financial situation. Before you decide to buy or to continue to hold a Life Products you must read the relevant Product Disclosure Statement. The Target Market Determination (TMD) for the product is available on our website.