We often insure our physical property like cars, homes and contents, but what happens if you are unable to repay your loan?
Nobody likes to think about worst-case scenarios and, let’s face it; insurance isn’t the sexiest of topics. It can feel like you’re constantly paying out all this money to insure your life, your health and all your worldly belongings without ever getting anything back.
What’s the point of protecting your home and contents but not your ability to pay back your debt?
Ask yourself these four questions:
Q. How will you repay your home loan if something happens to you?
Q. Are you the main, or only, income earner in your family?
Q. If you lost your job or were no longer able to work, how long would you be able to continue making your loan repayments?
Q. Could your family manage the loan repayments if you weren’t around?
If you don’t know or aren’t sure of the answers then I hope you take the time to keep reading, because there are ways to protect yourself and your family if you can’t pay your mortgage.
Mortgage protection insurance is a type of insurance that provides protection for you and your family if you can no longer work due to events such as involuntary unemployment, illness, injury or worse. Basically, it can help you maintain your lifestyle and protect your home when you no longer can.
It shouldn’t be, but often is, confused with Lenders Mortgage Insurance (LMI) which protects your lender and NOT YOU if YOU default on your repayments.
If you took out your home loan through a mortgage broker I would hope that they spoke to you about mortgage protection. With all the other costs of buying a property you might have written it off at the time as an unnecessary expense.
Mortgage protection offers security of knowing help with your repayments is available if you need it, and is generally quick and easy to put in place so if you didn’t take it out when you got your mortgage it mightn’t be too late. Get in touch with your mortgage broker to find out what your options are and whether you should consider mortgage protection insurance.
Did you take out and need to use mortgage protection insurance? Share your story in the comments below.
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