Advice needed on Mortgage Protection Insurance

From: Marc Krisjanous


Hi all,
We are looking at Mortgage Protection Insurance but someone has also mentioned just going for Income Protection Insurance.

We would like to here everyone’s opinion on the two; which is best for our current situation - no PPOR but 1 IP with IO mortgage and any recommendations of where to go.

Best Regards

Marc
 
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Reply: 1
From: Dale Gatherum-Goss


Hi Marc

I think that income protection insurance is better. It will provide you with the income to put food on your table, pay your bills and cover the mortgage . . .

And, it is tax deductible.

Dale
 
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Reply: 2
From: Rolf Latham


Hiya

Income protection beats straight Mortgage Protection for many reasons icnluding the ones mentioned Be aware though the IP will be lost more expensive than MP AND tends to have much tougher rules etc if you are over a certain age or you have some sort of medical issue.


Ta

Rolf
 
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Reply: 2.1
From: Rixter ®


If you have your finances structured with a LOC , you can use the LOC to cover you until such time as you find another job. Lets face it, the types of people who do invest aren't really the types of people to be out of a job for too long anyway.


Happy Investing,
Rixter :)
 
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Reply: 2.1.1
From: Dale Gatherum-Goss


Hiya Rixter

I agree, but, income protection insurance also covers your income if you cannot work because of illness or injury when even the fittest and most determined people cannot work.

To me, along with a will and a Power of Attorney, it protects the basic foundations of my wealth creation from which we can springboard both our business and our asset accumulation.

I agree that relying on your LOC is an option, but, I am not sure that it is the best option for me.

BTW, the banks also like to know that you have this type of insurance because it means less downside for them.

Just some early morning thoughts . . .

Have fun

Dale
 
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Sim

Administrator
Reply: 2.1.1.1
From: Sim' Hampel


My opinion on the use of LOCs is that if I get to the point where I need to rely on a LOC to survive, then it must be pretty serious. The last thing I want to be doing at that point is getting myself further in debt.

My preferred approach is a combination of insurance, plus a significant cash buffer for emergencies (placed in an offset account). I use my LOCs for buying assets, or for short term personal finance requirements only.

 
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Reply: 2.1.1.1.1
From: Andrew S


Can anyone recommend any particular company for income protection insurance? What conditions should I be aware of in the fine print of income protection insurance?

Thanks

AndrewS
 
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Reply: 2.1.2
From: Rolf Latham


Hiya Rix

Income protection insurance will NOT protect you against unemployment, neither will mortgage protection insurance beyond a certain point.

Income protection insurance can have very limited or very wide ranging claim possibilities.

As an exampple psychiatric illness can commonly wipe you out for 2 years plus. People usually insure their cars but dont commonly see the need to insure their biggest asset - their capacity to produce an income.

Nah I dont sell the stuff, its just I have seen at least a dozen lives absolutely financially stuffed which could have been prevented with a moderately priced policy.

Ta

Rolf
 
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