Q. Hi Paul. We’ve heard that we can insure our loan amount and our repayments in case we get injured or die. We have two kids and want to make sure our and their future is protected. How do we go about this?
A. At Property Secrets, when we do a mortgage plan for people, it’s not just about how many properties they can get finance for. It’s also about protecting our clients for the best and worst case scenarios. We do this by looking at their current protection – and can I say that the majority of clients I sit down with have little to no insurance.
We offer income protection (to service the loan) and life protection (to pay out the loan) if an accident occurs. We do this because everyone insures their home contents, their car, their travel but not themselves and/or investments. It doesn’t make sense.
It really comes down to choosing the right place to get your loans from. Most mortgage brokers cannot offer this service to their clients as they are not accredited and not allowed to do so. Most mortgage planners are and can offer it. Look for a mortgage planner to ensure total protection.
Paul’s tip: Consider what would happen if you lost the ability to earn money today through injury. Would you be able to repay your loans? Now consider what would be left behind if you died – debt or a cheque from the insurance company? I know which way I’d go for peace of mind.
Source: "Ask Paul" which is a regular feature provided for Your Investment Property Magazine by Property Secrets where you can ask Paul for his thoughts on any of your property investment queries.