Risk insurance and financial planning
Mortgage protection and lender’s mortgage
Mortgage protection and lender’s mortgage insurance (LMI) are for two different situations.
Lender’s mortgage insurance is usually required where your deposit is less than 20% of the purchase price of your property and protects the lender in the event that you default on your repayments.
Mortgage protection however is insurance that supports you in case you become involuntarily unemployed or are unable to work due to illness or disability. It makes sense to ensure that you can continue to meet your commitment in the case of unforeseen events.
Life insurance provides a lump sum payment to your beneficiaries in the event of your death. If you are the main income earner in the family, this insurance will help your family manage their future (for example paying out mortgages, schooling and other family expenses) without your ongoing earning capacity.
TPD – total and permanent disability
You can choose to cover yourself for either total or permanent disability or death options, providing you can no longer work or in the event that you die due to illness or accident. When combined with life insurance, this can provide security for you and your family for the rest of your life.
Income protection insurance pays you a predetermined percentage of your monthly income should you be unable to work due to illness or injury.
Building insurance should provide you with adequate cover in the event you need to repair or replace your investment property (ie home, garage, shed).
Landlord insurance is a policy to cover an investment property owner from financial losses. Common features of a landlord insurance policy include malicious or intentional damage to the property by the tenant or their guests, theft by the tenant or their guests, loss of rent if the tenant defaults on their payments, liability including a claim against you by the tenant, and legal expenses incurred in taking action against a tenant.