Buying a home for the first time is an exhilarating mix of excitement and stress, but before you start picking paint swatches, you need to consider protecting you asset with life insurance. You need this cover, because if anything should happen to you, whether it’s illness, sudden disability or even death, the bank has the right to sell your property to cover the outstanding loan amount. That’s bad news for your family.
Peter Castleden from life insurers Indie says that with life insurance, if any of that should happen, you or your beneficiaries get a lump sum paid out to cover your bond.
“Life insurance also covers more than just your home loan. It’s used to cover all your outstanding debts so your loved ones aren’t left with any hefty bills to pay if something happens to you,” says Castleden. “If something happens to you and you can’t pay the bond, life insurance pays out a lump-sum to cover the outstanding amount so that your family can stay put and continue to thrive.”
Step 1: Do some research. Ask friends and family, talk to your bond originator or financial advisor or broker. The best advice often comes from someone you already trust.
Step 2: Request a few quotes. Most reputable financial services providers have online tools that allow you to get an idea of your potential premiums, which makes it easier to compare. Remember that the cheapest isn’t always the best, and as always, chat to your financial advisor or broker for advice.
Step 3: Cover only what you need. You can keep your premiums low by making sure your cover amount is exactly what you need. There’s no point in paying more for an eventual payout that is bigger than your actual debt. But if you’re unsure, speak to your financial advisor or broker and they can do a full needs’ analysis for you.
Step 4: Choose a life insurance provider with a good reputation and solid backing. Consider the customer services, benefits beyond cover, the price, and of course the terms and conditions of the policy as well.