Making sure you can pay the loan
There are three main ways you can make sure that your home loan is paid if the worst happens.
Insure your loan – loan or mortgage protection insurance repays your loan if you die and makes loan payments for you in situations when you can’t work such as illness or accident, and redundancy.
Insure your income – income protection insurance provides an income if you can’t work. They usually cover situations like illness, accident, redundancy and bankruptcy. Payments are based on a percentage of your normal income.
Insure your life – life insurance pays out a lump sum if you die and many policies include an early payout if you are terminally ill. Some also cover critical illnesses such as cancer or strokes.
It is not enough just to buy insurance. You also need to know that if you make a claim your insurance will provide the help you’re expecting.
Here are some things to consider…
- A big well-known company is a good investment when it comes to insurance – you want to know they will still be there when you need them.
- A good claims record is more important than price – so ask friends and family about their experiences with different insurance companies.
- Read the small print carefully. Look for policies that are written in a language you can understand and that have few exclusions. Ask the company to explain the conditions to you.
- Ask about a ‘free look’ period – this gives you time to read the policy and change your mind before you start paying your premiums.
- Ask about payment options – you’ll find it easier if you can match your payments to your paydays and loan payments.
We can arrange your insurance at the same time as your home loan through Oliver Broomfield Mortgage & Insurances
Do you have a Will or Enduring Power of Attorney?
When you buy your home it’s a good idea to make or update your Will. If you die without one it can take ages to get everything sorted out and the people you care about most may miss out. For instance, your partner doesn’t automatically get everything and if you’re not married they may get nothing.
The other thing you should think about is having an enduring power of attorney. This gives someone you trust the power to act on your behalf if you can’t look after your own affairs for any reason.
Both are important legal documents. Your lawyer can tell you more – and may even be happy to produce a Will for you for free.