The problem with any life insurance policy, is that those who need it most don’t have anything. Or in some cases they have minimal cover or claim they can’t get it due to their health.
Of course it’s distressing as an insurance adviser or a family friend to learn how few people with young kids have life insurance or any insurance especially mortgage protection insurance which is the one insurance policy designed to protect your family and keep you family home for your family.
Who Needs A Life Insurance Policy?
The main income earner should always have life insurance and/or mortgage protection cover is the family is reliant on their income to pay the mortgage repayments, but even non-income earners should have some cover to protect the family as their role is important too.
Stay-at-home spouses have a special need for a life insurance policy.
Should a stay-at-home parent pass away, the remaining parent would find themselves suddenly paying for childcare and everything else a stay-at-home parent does on a day to day basis. That’s why it’s essential the parent at home has a policy.
Too often, we’re sold insurance products with the broker’s eye on commissions rather than genuine need or affordability. That’s a recipe for failure when you have to pay the premium, and it sets too many of us up for a lapse in coverage.
Approximately 25% of people who buy life insurance stop paying their premiums in the first three years. By the 10-year mark, almost 50% quit paying for the cover and not because they do not need it.
So you pay all that money, month after month, to wind up with zip… nothing!
What you need is a policy that’s easy to buy, easy to own and cheap!
Buying what’s called “mortgage protection insurance” is simple and is very affordable when structured correctly. Correctly does not mean having a huge amount of cover, but means covering the important things – those things that can have a huge financial impact yet are unlikely to happen.
Remember these 5 pointers when shopping for a policy
- Shopping for life insurance is easy on the internet CLICK HERE to buy online.
- Certain health conditions make insurance more expensive or even unavailable. If you have such a condition, you’re what’s known as “loaded” in the industry, which means you will pay more for insurance cover. It also means that those insurance companies that assess the risks properly will generally be able to provide cheaper insurance to healthy people.
- How much life insurance or mortgage protection cover do you need? The simplest rule is … what you can afford?
- Stay-at-home spouses who care for children should have insurance too. They have an “insurable need” because you’d have to pay someone to r your children in the event a spouse or partner dies and this is often a forgotten issue.
- Cash back offers and the like are good for the first year, but any life based insurance is a long term commitment, so get the policy that is going to be the most suitable over a long-term.
Should You Have Mortgage Repayment Cover Too?
It seems a simple question, but many people will argue that they don’t purely buy mortgage repayment cover on the basis of the cost, but ofetn people do – it is just human nature…
Unfortunately most people that buy mortgage protection insurance from the banks or buy mortgage protection insurance online will not bother to get cover for their home loan repayments, but when you ask if mortgage protection cover important you might have a different opinion.
It makes sense that you cover the biggest risk – that is the loss of an income.
When we talk about the loss of an income we are not talking about the complete and permanent loss of an income. Most people that lose their homes to a mortgagee sale do so because they are unable to make the payment due to a short-term event, not a permanent event.
We Want Cheap Insurance Cover
Of course, life insurance like any insurance is never cheap but do you really want cheap insurance cover?
Insurance is a written promise for financial,l compensation and I know I would rather have good cover that cheap cover.
When people think about it most people do not actually want the cheapest cover!
Ask The Question
We don’t know what we don’t know and for this reason we always suggest that you seek advice from a professional insurance adviser.
There are lots of insurance brokers out there, but it is best to speak to someone that you know and can trust and typically that will be the mortgage broker that helped you previously.