Do you need Mortgage Protection insurance?
Often when it comes to insurance, many people overlook the importance of protecting their hard-earnt lifestyle. Would you be able to keep the roof over your family’s head if you couldn’t continue working due to illness or injury? Perhaps you would like to consider Mortgage Protection insurance?
Mortgage protection insurance is a special type of insurance where you receive a regular, monthly benefit if you get injured in an accident or suffer with a severe illness. You will continue to receive a monthly benefit from the insurance company until you’re well enough to go back to work or you officially retire at age 65 or older. For many, the ability to keep meeting large financial commitments at a time of uncertainty, is the difference between being able to maintain financial stability or not.
In most cases, the amount of the benefit you receive will not match the exact income you had at your job before you became disabled. Generally, the insurance company will pay you around 62.5% of what you were earning before, or up to 115% of your regular mortgage repayments. However, it is important to note that most Mortgage Protection benefits are not subject to tax and many allow you to still make a claim even if you are receiving a benefit from ACC.
As with all personal insurances, mortgage protection insurance is completely optional. Your decision to purchase a mortgage protection insurance policy should be based on the nature of your financial commitments and your desire to mitigate your risk. For instance, if you are the primary breadwinner in your home and you have a family you would need to continue to provide for even if you couldn’t work, then mortgage protection insurance may be a good investment.
In New Zealand, tens of thousands of working people end up injured or sick and become unable to work every year. If you have a lot of money in the bank and no family to support, then you could probably survive on your own in this situation. But if you’re a working-class person with very little savings and a family to worry about, then you cannot afford to go without income for weeks or months. Mortgage protection insurance could be the only solution for maintaining financial stability in your household.
What will mortgage protection insurance cost?
The cost of mortgage protection insurance is influenced by many factors such as; your age, health history, selected coverage amount, the nature of your job, and the amount of time it takes to receive your insurance benefit. Obviously, these factors will be different for everybody, so your premium costs will vary. Read more about how much mortgage protection insurance costs here
If you would like advice about what’s best for your situation, we can connect you with an experienced adviser – understanding the complexities that go along with Mortgage Protection means they can advise you about benefits that will work for you.