DATE: 18/02/2014
CATEGORY: Blog, House Insurance, Insurance, Life and Income Protection

protect your lifestyle – get pre-approved insurance


During the early stages of the home buying process we’re often asked: What would happen if I couldn’t pay the mortgage? How can I protect my income? Will the bank make it compulsory to take out life insurance?

Further down the track when these clients finally complete their sale and are all moved in the need for insurance takes a lower priority. Getting the new big screen TV, or the latest lounge suite vies for their dollar. Sometimes this is because they don’t fully understand the benefits of insurance and can easily be swayed by some common misconceptions about who should have what and why. So they put it in the, ‘too hard, ‘I’ll deal with it later’ basket.

It’s a big mistake – one some people realise too late.

Here’s a couple of recent close-to-home examples which have prompted us to write this blog and draw attention to avoidable risks:

Simon* a professional in his mid-thirties was banking on protecting his income only to find that because of a pre-existing health condition his application for cover was declined. He has an uber cool apartment but now worries about not being able to pay the mortgage.

Mark and Susan, a couple with two young children should also have sorted their insurance sooner. Shortly after moving into their dream home Susan developed a medical condition which meant that the cover offered to her was on special terms resulting in higher premiums and exclusions. Had they applied earlier when they’d first enquired they would have saved money and secured cover on much better terms.

* Names have been changed to protect client privacy.

When should you get your cover sorted?

Don’t sit on the fence or leave it until the last minute. Until you’ve arranged cover, you’re at risk. At risk of losing what you’ve worked hard for. And don’t be like Simon, Mark and Susan and wish you had acted sooner.

We recommend sorting your personal insurances before committing to purchasing property. Applying for insurance cover early is a bit like arranging a home loan pre-approval. It puts you in the best possible position while still leaving you free to change your mind.

It can take four or more weeks after applying for personal insurance for your application to be assessed by the insurer and before you know if you will be offered cover. For example, insurers may need to request medical records from your doctor. So the sooner you apply the better.

What if something unforeseen were to happen after committing to the purchase of a property and before moving in? Worst case scenario, if your ability to meet your mortgage repayments were to change (e.g. only one income instead of two incomes when the mortgage was approved) the bank could refuse to advance your mortgage. You would be in a binding contract to buy the property with no way out. What would you do?

You may be surprised just how cost effectively some financial risks can be covered. For example, ballpark monthly premiums for life cover of $350,000 for a 35 year old male non-smoker are $22 and for a 30 year old female non-smoker $15. Ballpark monthly premiums for income protection for an office manager with a monthly benefit of $3,750, $40.

Do you need cover?

A good way of looking at insurance is to consider which category you want to fit into:

a) No cover
b) Some cover for some things say, just life cover but no disability cover
c) Not enough cover but some for each event
d) All the bases covered

When considering your risks you may find it helpful to have a look at the following link what is my risk?

Find out about the different types of cover and the benefits they provide by clicking here my insurance options.

Our philosophy

We’re not into ramming insurance down people’s throats. But we’ve seen too many good people come unstuck. We never want to be in a position where we could have or should have been more insistent in helping minimise risks and maximise security and peace of mind.

Our approach is to give you the best advice and to help you make informed decisions. We care about our clients, their families and their futures. We love helping clients progress and hate seeing them regress because of something they could have sorted early and cost effectively.

We also have a professional and legal responsibility to point out the risks associated with borrowing money. We could be sued for not doing so!

The benefits of getting pre-approved for insurance

  • It costs nothing and is 100% obligation free.
  • You’ll have certainty and can continue with your plans with confidence.
  • Avoids budget blow-outs.
  • Saves money.

How do you arrange pre-approved insurance?

Do you know what you want?

If you already have a clear view on the type and amount of cover you need, or on the type of cover you would like to know more about, let us know and we’ll get it sorted.

Need advice?

Alternatively for a comprehensive, obligation free assessment contact us. We’ll demystify some common myths about insurance and we’ll help you understand everything you need to know to make the best possible choices.

For the cost of a cup of coffee a day or that extra glass of wine on Friday you can protect your futures and your lifestyle.

Whatever you do make a call. Don’t just park it! Avoid unwelcome surprises, seek certainty and get pre-approved early.

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Posted in Blog, House Insurance, Insurance, Life and Income Protection

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