After a certain amount of time has passed by and you have entered your adult years, you might start a business, family, buy a house or make other investments. Like most Australian adults, you might do all this with the help loans and mortgages. In fact, the majority of a household’s debt is for housing.
But in the midst of the excitement of growing up, we often forget that these loans are payable over a long time period. This means that you will be paying them off over the next 20-30 years, making monthly payments.
This is why insurers provide loan protection insurance plans such as Freedom Loan Protection Insurance. This type of insurance pays a lump sum amount to pay off your loans and debt in case of death, terminal illness or permanent disability.
It offers borrowers the peace of mind that your family and loved ones will be protected in case a situation occurs that might inhibit you from making the payments.
Here are 5 reasons why you should get loan protection insurance:
Protect Yourself against Unpredictable Situations
It is impossible to predict any type of accident; hence, the name accident. We don’t know what situation we will be facing in the next few moments. Some of these accidents can lead to morbid situations such as permanent disability or death.
Having loan protection insurance ensures that your debt will be paid off even when you are not alive. This will reduce your worry that your assets or business will not be confiscated and your family will struggle to get by.
Pay off Debts and Loans
The main purpose of loan protection insurance is to provide you with a way to pay off your loans and debt even after you have passed away. Also, depending on your insurance plan, it can provide coverage if you have been diagnosed with a terminal illness or have suffered an injury that leaves you permanently disabled.
Protect your Family
Segueing into the next reason, loan protection insurance is a practical way of making sure that your family does not have to struggle to pay off your loans after you have passed away or are unable to work due to a disability. Loan protection will specifically cover your debt so that your life insurance can help your family keep expenses rolling.
Financial Security and Peace of Mind
If you own a house on a mortgage and have young children, one of your concerns will be about them not having a roof over their head if you pass away. Having the assurance that you have provided a way for your family to pay off your loans will give a sense of peace.
You won’t have to constantly think about their well being when you’re gone.
They are Simpler than Forms of Life Insurance
With insurers like Freedom Insurance, the loan protection program is easier. It has a simpler underwriting process and the premium rates lower compared to other types of life insurance plans.
They are also flexible as they can be paid to you in case of illness or injury or your nominee in case of death, to either pay-off loans or use it for other purposes.