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Life can be quite tough when you have added stress of paying out your mortgage but did you know that life insurance and income protection plans can help you to protect your mortgage? Different types of insurance plans exist in the Australian market today but life insurance and income protection plans stand out because they offer the kind of financial security that no other insurance offers.

Are you thinking, “I will slowly pay off my mortgage?” “I don’t need to put extra money from the household income into insurance. Insurance premiums will just be an extra financial burden”. Have you been asking yourself lately, “Why do I really need insurance to protect my mortgage?”

Here are some statistics and information that will help you to understand why you need mortgage protection and how life insurance and income protection can help you.

  • According to the latest statistics from Real Estate Institute of Australia, the average household in Australia has become a victim of severe mortgage stress. Statistics have revealed that almost 37.4 percent of household income goes into making mortgage payments.
  • According to a report by Sydney Morning Herald, housing foreclosures have increased rapidly in Australia due to non-payment of mortgages. Job loss and death of the main earner of a family are the most common reasons for housing foreclosures in Australia. According to the latest statistics, banks and housing societies in Australia have repossessed almost 22.5 per cent more homes in 2011 as compared to 2010. The hardest hit areas are regional centres in New South Wales and western Sydney.
  • According to Fitch-Australia, the overall household debt seen as percentage of income has increased from 49.4% in 1991 to 156.4% in 2010. This simply states that Australian borrowers are deep in debt as compared to the situation two decades back.
  • According to a report by the Australian Bureau of Statistics (ABS), an estimated 3,958,300 people or almost 20% of the Australian population is suffering from some form of disability or other.

What does the above statistics really refer to?
The statistics reveal that people in Australia have been borrowing heavily and many have become victims of foreclosure as they have not been able to pay their loans and thus protect their mortgage. Do you understand how severe the situation really is?

The difference is that today you are able to provide some form of financial security for your family but tomorrow they might be left without a roof under their head. Do you really want your family to live that nightmare?

How does insurance really help?
Life insurance and income protection plans have been designed in such a way that they can offer financial security to your family when you are unable to work or completely bed ridden or if you die. If you die tomorrow, do you think your children can protect your mortgage? If you meet with an accident and are out of work for months without any income then how will your family pay off the mortgage loan amount and also take care of the household needs? Have you ever thought of such a situation?

There is no better time than now to start thinking about securing the future of your family financially!  Time to get some life insurance quotes. Let’s take a look at how life insurance and income protection can help you to protect your mortgage.

Benefits of Life insurance and Income Protection Insurance
There are different types of life insurance and income protection plans available in Australia. Life insurance offers death benefits while income protection offers monthly income for a specific period of time. Since both life and income protection insurance offers financial security, they are considered as perfect covers for protecting the mortgage if injury, accident or death happens.

Some of the benefits of life insurance policies include:

  • It is applicable for all Australian residents aged between 18 and 64 years
  • You can insure up to $1.5 million and the amount of cover available depends on your age
  • Life insurance offers options for single or joint covers
  • Depending on the type of life insurance policy, you can get 100% benefit when diagnosed with a terminally ill condition
  • Some insurance providers offer a free interim accidental death cover, which is valid up to 30 days
  • Depending on the life insurance policy and the provider, a lump sum amount will be paid to your beneficiaries on your death

Some of the benefits of income protection include:

  •  It is applicable for all Australian residents aged between 18 and 59 years
  • You can choose your benefit period or the time when the payout has to be made, from 6 months to a maximum of 5 years
  • Some insurance providers offer rehabilitation benefits with their income protection covers
  • Premiums are tax deductable
  • You can insure up to a maximum of 75% of your gross yearly income

Since both life insurance and income protection covers provide an option where you and your family will receive a monthly income or a lump sum amount, it will be easier to protect the mortgage. In times of financial crisis when you are hospitalized due to an accident, your family will not have to worry about how to make ends meet and how to pay the outstanding loan amount because your income protection policy will pay out a specific sum every month. After your death, your family will not be without a roof over their head. On top of that, they will be able to pay out the loan amount with the lump sum received from your life insurance.

That’s the power of life insurance and income protection policies – they offer more than just money; they offer a future for your family!!

article by Income Protection Insurance AU : The fastest way to get Australian income protection quote online