Do I need ‘Life Insurance’ as a first home buyer?
Saving for and owning a first home can be very rewarding but at the same time it involves taking on a big commitment. It’s important to cover all your bases, so that should anything happen; your family can still have a future in your first home.
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What is Life Insurance?
‘Life insurance’ is a lump sum payment to your family and other beneficiaries in the event of your death or upon being diagnosed with a terminal illness. The purpose of life insurance is to provide your family with financial security if something was to happen to one of you.
Life insurance can also include multiple different types of cover for you to choose from, depending on your circumstances:
Term life insurance: Lump sum of money paid out if the named person dies within the defined term
Trauma insurance: Lump sum of money to help you meet medical expenses and clear debts when you have suffered a medical trauma
Total and Permanent Disability (TPD) Cover: Provides a lump sum payment if you become totally and permanently disabled
Life Insurance is one of the most important steps in buying your first home
The benefits of getting Life Insurance when buying your first home?
As a first home buyer, it is important to protect yourself and your family if things don’t go to plan.
- Getting life insurance at a younger age is cheaper than getting it later in life
- You may have the options to increase or decrease the benefit of the policy later on.
- Most policies will provide the benefit payment to cover immediate costs following death without having to serve a waiting period
- You can have the insurance premiums coming out of your superannuation fund (rather than paying it from your savings), applicable for some types of cover
- FHBA’s life insurance partners can assist you to get the right life insurance policy by comparing a range of options for you.
- Benefit payments are generally tax-free (depending on structure & your beneficiaries)
- You may be eligible for multi-policy discounts if you take out cover with your spouse
Why should you get Life Insurance when you purchase your first home?
Whilst it is something not everyone wants to think about, Life Insurance should be one of your highest priorities once you purchase your first home.
At FHBA, we feel it is important regardless of whether you own your first home or not. As your first home is likely to be the biggest asset you purchase and the associated loan is likely to be your biggest debt, it’s worth protecting yourself and your family from the unexpected events that can take place in the future. In addition, most life insurance products now offer terminal illness payments upfront upon being diagnosed with a terminal illness rather than at the date of your death.
As discussed above, there are multiple types of Life Insurance cover that fall under the life insurance suite of personal protection, and each type of insurance can provide a certain benefit payment to help you and your family after different types of life events, such as death, critical illness, disability, or serious injury.
Whether you use your mortgage broker, FHBA’s preferred partner, a financial adviser or doing it on your own, the important thing is to protect you and your family from the unexpected. It doesn’t take much to figure out how much life insurance cover you really need and to compare different options, there are plenty out there!
In the process of buying your first home or have you already bought it?
If you need life insurance cover, simply complete the form below and a FHBA Coach will get in touch with you and organise a no obligation & complimentary consultation with our Life Insurance partners:
First Home Buyers Australia