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    Your home is your most important asset, so what if you can’t work?

    When life throws you curveballs, it’s best to be prepared. For the average Kiwi, paying off a mortgage can take up to 30 years. That’s a very long time to assume you won’t have any hiccups. Your home is one of your greatest assets, but when your health and wellbeing render you unable to work – your home loan repayments aren’t something you want to worry about.

    A study by Mind The Gap found that 47% of New Zealand households wouldn’t survive more than one month without their income. If something unexpected happened to keep you out of the workforce, losing your home would be devastating. That’s why it’s important to have a safety net, so you can focus on rest and recovery without worrying about your mortgage.

    Protect your most important asset

    Mortgage protection insurance is a simple way to make sure you’ll always be able to pay your mortgage, even while you’re sick or injured. Here’s a quick breakdown of how it works:

    With the help of your mortgage provider, you decide on the amount you need to cover your mortgage repayments over a specific period. It can often be confused with income and life insurance, but there are some key differences:

    Mortgage protection insurance is designed specifically to cover your mortgage repayments.
    Income insurance will cover a monthly payment to replace a portion of your income if you have an illness or injury and are unable to work.
    Life insurance protects your family should you die unexpectedly. Your insurance provider will pay a lump sum known as a death benefit to your beneficiaries after your death. They can then use the money for whatever purpose they choose.

    Most insurance providers will let you choose whether you want to cover 110-115% of your mortgage repayments (or 45% of your gross salary). This means, if you were unable to work, you could cover your mortgage repayments and some additional bills.

    How does ACC fit in?

    ACC provides fair compensation for work-related injuries. It covers a portion of medical bills directly related to your injury and a portion of your salary while you’re recovering. The problem with relying only on ACC is what it doesn’t cover – accidents and injuries outside of the workplace and serious illness or disease (unless directly related to a work injury).

    Having a backup like mortgage protection insurance means that no matter what happens, you and your family can still pay those all-important bills.

    When you might need mortgage protection insurance

    1. Accident and injury
    Accidents happen but sadly, your mortgage repayments don’t stop while you recover. Mortgage protection insurance lets you focus on getting better while your home loan keeps dropping down.

    2. Illness
    While there are some sickness benefits available in New Zealand, they’re usually dependant on household earnings – and can take time to get set up. Mortgage protection insurance is the only way to be 100% certain your home is protected straight away should you fall seriously ill.

    3. Disability
    A sudden disability such as loss of hearing, eyesight or something even more serious, will be stressful enough without having to worry about having a roof over your head. Mortgage protection insurance will again ensure you can rest easy, while you figure out your next steps.

    4. What if I lose my job?
    A major public health threat like COVID introduces a lot of uncertainty. It’s been tough for many people, and in some instances, has forced businesses to downsize or close – and make employees redundant. While mortgage protection insurance might not cover an event like redundancy, in most cases redundancy insurance is available as an add-on benefit with income protection insurance.

    Depending on your provider, this policy means that in the event of redundancy, your mortgage repayments will be covered for up to six months. After that, you would be expected to have a new job.

    Get protected and focus on what’s important

    Mortgage protection insurance is a great way to protect your home and family should you ever find yourself not fit to work. When choosing the right provider and policy for you, speak to an expert insurance broker – they’ll work to assess your circumstances and make sure you have the right cover for you and your family.

    Get set up with mortgage protection insurance today – get in touch with an insurance broker at Global Finance.

    **Underwriting criteria and insurer terms T’s and C’s apply