Mortgage Insurance – How Does It Work?
Mortgage insurance meets your mortgage repayments, or makes up a portion of your lost income, in the event your earning capacity is seriously affected by illness or injury.
The purchase of your home is one of the largest financial commitments you will make. Once you have committed yourself to a home loan, your lender expects you to meet your repayments without fail, even when you can’t work due to sickness or injury. No one likes to think about serious illness or death, but it makes sense to reduce the financial impact of such possibilities through good mortgage insurance.
While many people focus on getting ahead and growing their asset base, we often give little regard to protecting what we already have. We don’t hesitate to insure our house, our car, our boat, but often neglect insuring what is effectively our most valuable asset – ourselves, our health and ability to earn income.
Consider the following relevant information:
For every one home lost by fire… h
… four are lost through death – as a result of being unable to keep up the mortgage repayments following the death of an income earner.
… but forty-eight homes are subject to mortgagee sale and lost as a result of disability of an income earner and being unable to keep up the mortgage repayments.
This highlights the importance of having a suitable, balanced mortgage protection insurance in place that will assure the security of the family home should the unthinkable happen to a family member, whether it be death, terminal illness or total disability for a period of time.
Read what our clients say…
I simply spread the word to people I know that you provide a very professional service…. In my experience, your consultation approach is professional and your report is thorough. So, I will continue to spread the word for you on this basis.
Johannes Dimyadi, Auckland
Mortgage Protection Is Important For Both Working Partners
It doesn’t matter who is the major breadwinner in the household; if one partner becomes seriously ill, disabled or dies, it will have a significant impact on the household finances.
The healthy partner may need time off work to care for their loved one, drive them to hospital appointments, and spend precious time together as a family or deal with their own trauma. They may also face increased expenses such as additional childcare, just to keep up their existing working hours.
While it may not be necessary to have the same level of mortgage protection cover for each, it is important that both partners are covered by mortgage insurance.
Benefits of Mortgage Insurance
Your three main assets worth protecting are your home, your income and your health. It takes just one small hole in your protection plan to risk or lose your assets. Mortgage protection insurance plugs up that hole.