If you suddenly couldn’t work, what’s the one expense you’d regret giving up the most? The roof over your head would have to be high on the list, right?
Data from realestate.com.au shows that 58% of those with a home loan are more concerned about the cost of their mortgage than any other expense, increasing to 63% among young families.
An even larger percentage placed smaller ongoing costs, such as petrol (72%) and electricity (77%), over other chief money concerns.
But while most of us can relate to the frustrations of the rise and fall of gas prices and the fluctuating nature of our energy bills, mortgage stress can be a little more serious, especially when you have your own family unit depending on you.
Defined by the Australian Bureau of Statistics as the result of spending more than 30% of your household income on mortgage repayments, mortgage stress can become exacerbated by illness or job loss.
Home security affects the safety and happiness of those we love the most. So if we’re worried about the cost of our mortgage – and how the hell to pay it off should the worst happen – what steps can be taken to ease the mind?
Life and income protection insurance
A recent survey by life insurance company NobleOak found that buying a home and taking out a mortgage were the biggest life events to prompt taking out life or income protection insurance. Having a baby on the way spurred a further 38% into action.
Income Protection provides you with a monthly income to replace your salary if you’re unable to work due to serious illness or injury. Once your waiting period has elapsed, it will pay a set amount each month for the duration of the benefit period selected. You can insure for up to 75% of your pre-tax income, explains NobleOak CEO Anthony Brown.
“Having income protection insurance can help ensure your family will not be left with a major financial burden if you’re left without an income if you were to become sick or incapacitated and unable to work. It can be used to pay for monthly mortgage payments, and to also cover things like household expenses and children’s education essentials.”
