Congratulations on owning your own home! Paying it off will be hard work, but everyone has a mortgage, so it will be OK – won’t it? Unfortunately, many do not fully think that through.
Debt is a reality for millions of Australians – from mortgages and car loans to credit cards and personal finance agreements. While debt itself isn’t inherently bad, it becomes a serious risk when life throws the unexpected your way. Illness, injury, or sudden unemployment can quickly turn manageable repayments into a financial crisis. This is where personal insurance cover steps in as a crucial safety net.
Personal insurance – whether it’s income protection, life cover, or total and permanent disability (TPD) insurance – ensures that if you can’t work due to unforeseen circumstances, your obligations don’t spiral out of control. For those carrying debt, this protection isn’t a luxury; it’s a shield against the domino effect of missed payments, mounting interest, and damaged credit.
Consider the alternative: Without insurance, a sudden loss of income could force you to dip into savings, sell assets at a loss, or rely on high-interest credit to stay afloat. In the worst cases, it can lead to foreclosure, bankruptcy, or long-term financial instability.
Insurance, on the other hand, provides a steady stream of funds to cover repayments, living expenses, and even medical costs – allowing you to focus on recovery rather than survival.
Critics sometimes argue that premiums are an unnecessary expense, especially when budgets are tight. But for those in debt, the cost of going without can be far greater. A modest monthly premium can mean the difference between keeping your home and losing it, between protecting your family’s future and leaving them with a financial burden.
Insurance is not just for those with kids and a mortgage either. If you earn an income, you should be doing what you can to protect it. Your income is your biggest asset.
If you are 35 earning $75,000pa and suddenly are no longer able to work due to illness or injury you would lose $2,250,000 if you were unable to work until the age of 65 (this figure does not include CPI increase allowance). You insure your car, why not yourself?
The basic start point is provided via industry super fund policy cover. However, we would recommend a review via a risk expert, as that cover is often found inadequate on further inspection.
Debt is a commitment to your future self – and personal insurance is a promise to protect that future, no matter what happens. In a world where uncertainty is the only certainty, it’s a safeguard no borrower should overlook.
Speaking from the position of providing debt advice: We recognise the importance of personal insurance to our clients and always recommend they discuss their personal position with a risk expert.
We do not provide such advice in- house; we work in conjunction with a business operating only in that space. If you want the best, use a specialist.
We often find however that at the time of buying a new home that type of discussion is furthest from client minds! So here is the reminder – Is it time you had an obligation free chat to someone about your personal insurance needs?
If so please call (03) 9511 8883 or contact your broker directly and we will co-ordinate the contact.