Do you have adequate loan protection in place?
So much emphasis is placed on insuring our cars, property and homes that we rarely consider how we’d pay for all these things if we were to lose our health, life and ultimately our ability to earn an income – our most important asset!
Insurance is often seen in an unfavourable light. We look to de-bunk some common misconceptions below.
Myth: “Insurance companies don’t pay claims”
Fact: The Financial Ombudsman reported 98% of insurance claims are paid without dispute4. This is a significant percentage of claims that were accepted and simply disproves the myth. As at 30 June 2011 ALI Group had paid a total of $20.2 million5 in claims!
ALI often share our claims statistics so you can see the variety of claims received, the amount they were compensated and how long the process took.
Myth: “My super fund already covers me”
Fact: One in two industry super fund members are underinsured by $100,000 or more7
- 50% are underinsured by $100,000 for life insurance
- 74% are underinsured by $100,000 for TPD
It’s estimated that life insurance cover within super is on average only 20% of what is needed. The average insurance amount payable from super is $70,0008 – for those who take the default level of cover.
Myth: “Life insurance is not affordable”
Fact: Premiums can cost less than the price of a daily newspaper or coffee.
81% say life insurance is too expensive, yet 61% overestimate cost6. An important feature of ALI Group’s loan protection is the flexibility to adjust the level of cover, making it even more affordable
Loan Protection – What is it? And why every home and property buyer should consider it.
Why you need loan protection insurance
Accidents happen. Bad things happen to good people. Times change. When life is cruising along nicely, it can be all too easy to forget these things.
So why do most of us insure our cars, our home and contents? We insure against our medical expenses, even our pets’ medical expenses. We protect ourselves against loss, from theft, natural disasters and unexpected medical and veterinary bills, but we don’t protect the biggest expense of all – our ability to make mortgage repayments.
Answer the following questions honestly to see if Loan Protection Insurance is something you should consider:
- Is your household reliant on a single income?
- If you or your partner lost your job tomorrow, how long would you be able to cover the mortgage repayments?
- If you or your partner could not work for a period of months, even years, due to illness or injury could your household manage financially?
- What would happen should you or your partner die? Could the remaining partner continue repaying the mortgage on their own?
- If any of the above should occur, would your family need to sell other assets or deplete savings in order to meet loan commitments?
Are your answers worrying? Then loan protection insurance may provide peace of mind. Depending on your insurer, level of cover and reason for your claim, loan protection insurance can cover your mortgage repayments for a set period, pay out a lump sum or help repay the outstanding loan balance up to your sum insured.
The good news is that we make the application process smooth and pleasant with ALI. There are no lengthy forms, any approved claims are payed to you (and not the lender) to do with what you like, and unlike many other loan protection products, if you change lenders, you’re still protected (for the life of the policy). It’s that simple.
For more information regarding our loan protection insurance, get in touch with a member of our friendly team today.
1 AAMI Fact Sheet, Shopping for Car Insurance, September 2008 | 2 Australian Trade Commission Report, Insurance in Australia, 2009 | 3 IFSA, A Nation Exposed, Closing the Protection Gap, 20051 General Insurance Code of Practice – Overview of the Year 2009 – 2010 I 4 ALI Claims were paid by the registered life insurer of the loan protection products distributed by ALI Group I 5 OnePath Life (formerly ING Life) Australia’s Attitudes Towards Life Insurance, Dec 2008 I 6 2008 survey by Australian Institute of Superannuation Trustees (AIST) and Industry Funds Forum (IFF) – AIST Media Release, 3rd June 2008 I 8 Rice Walker Actuaries, Analysis of Insurance Needs, May 2005
Loan Protection Plan is jointly issued by Hannover Life Re of Australasia Ltd ABN 37 062 395 484 (Death, Terminal Illness and Living Benefit) and QBE Insurance (Australia) Limited ABN 78 003 191 035 AFSL 239545 (Involuntary Unemployment Benefit). It is distributed by Australian Life Insurance Distribution Pty Ltd ABN 31 103 157 811 AFSG 226403 (ALI). ALI receives commission for each policy sold. Any advice provided is of a general nature only and does not take into consideration your personal objectives, financial situation or needs. You should consider the Product Disclosure Statement (PDF 130.6KB) when deciding if this product is appropriate for you.