July 17 2019
Last month, Mark Winter of Loan Market Springfield had his first claim.
A client had come in to his office a few years ago to repair a loan application. The pre-approval was in place, but the lending criteria changed mid process so Mark had to refer the client to another broker. During the process, Mark had his standard conversation during the fact find and preliminary assessment around insurance. When the client told him he already had life insurance with his super - as they so often do - Mark reminded the client that this was a new loan scenario and his existing life insurance would likely only protect his previous financial situation. He put the client in touch with the local Wealth Market adviser for a review of his life insurance.
“We can’t give advice as brokers, but we can encourage due diligence. I say to clients, “You insure your car but you won’t insure yourself to walk over the road and get in the car?” That often resonates,” Mark Winter said.
Wealth Market reviewed the client’s insurance and organised new life insurance and income protection. Last week, the client hurt his back, requiring surgery and 12 weeks off work. His full surgery cost was covered via the trauma payout as was the 12 weeks of his lost income thanks to the income protection benefits resulting from the review of his life insurance.
The client told our Wealth Market adviser, "Well, the bank doesn't care if I can work or not, they still want their loan repayments and I would have been up sh!t creek without the insurance.”
One in three households has a home loan and Australians owe $1.45trillion in mortgages yet at least 60% of Australians lack the insurance cover to pay their mortgage if something unexpected happens.
So you may ask yourself why some purchasers negate to lock in insurance cover to protect their ability to cover the loan when so many of us have hundreds of thousands of dollars owing, and an income that is critical to paying off that loan.
Many homebuyers rush through the home loan process to settlement and ignore one of the most important questions. If you couldn’t work, who in your family would pay the home loan?
Make sure you’re having this 30 second conversation, Wealth Market is here to do the rest.