Questions Regarding Loan Protection Insurance

Mortgage and loan  protection insurance is designed to help you, and your family keep up-to-date with your loan repayments, when life events happen unexpectedly and regardless of mitigating circumstances. Put simply, mortgages or loans are often long-term commitments, so it makes sense to protect them.

Do You Think About the Unexpected?

There are a number of reasons why even the most responsible money managers may get into financial difficulty. Any of the following reasons can strike at any time and will leave you struggling to make your loan repayments:

• > Change in health - due to sickness, injury or disease

• > Loss of income - due to involuntary unemployment, or

• > Death and Terminal illness - when cancer, stroke or heart attack, etc. may occur.

Loan and Mortgage Protection Insurance – The Benefits

There are a number of benefits you can get from having a loan and mortgage protection insurance plan in place, which include:

• > The premiums are fully tax deductible

• > Financial protection (you will save your family the worry of lost income)

• > You will save at tax time (you will get more money back in your tax return, and this means more money in your pocket)

• > You can choose how long you would like to receive cover benefits if you are injured and unable to work

• > Benefit payouts for total and permanent disability

• > A benefit amount (e.g. hospital cash) can be calculated for each night you spend in hospital

• > Associated accident costs can be provided to cover incidental costs (e.g. counseling and rehabilitation).

 Common Questions regarding Loan and Mortgage Protection Insurance

Is Lenders Mortgage Insurance (LMI) different to Loan and Mortgage Insurance?

• > LMI - is compulsory and covers the lenders/credit providers if they lend you 80% or more

• > Loan and Mortgage Protection Insurance - covers your mortgage repayments in the event of death, sickness, unemployment or disability

Does the Unemployment Benefit apply if I am Self-Employed?

Yes. You may make a claim if:

• > You have worked in your business (for an average of 20 hours per week) for 180 days immediately prior to becoming unemployed, or

• > Your business has permanently ceased trading

What Happens to my Policy if my Unemployment Claim is Successful?

Your cover continues for death or terminal illness after making a successful unemployment claim, and your premium and benefits will remain the same.

Who will be the beneficiaries?

• > For a single life policy, the benefit will be paid to the policy owner or their estate, and

• > For a joint policy, the benefit payments are made to the policy owners jointly or to the surviving policy owner in the case of the death benefit

What happens if I need to make a claim and I have other insurance policies?

Upon acceptance of your claim, the loan or mortgage protection policy will payout a lump sum benefit directly to you or your estate and this will be in addition to any other payments you may receive from other insurance policies.

What if I am a Smoker now, will my Premium Change if I Stop Smoking?

• > Yes. Your premium can be changed to a non-smoker rate if you stop smoking for 12 consecutive months, and

• > You will need to make a declaration that you have not smoked any substance during this period

So, now that you are familiar with how "Loan and Mortgage Protection Insurance" can protect you and your family against any of life's unexpected events, contact an insurance broker. 

Questions About Life Insurance Policy

http://insuranceprade.blogspot.com

Very important questions on life insurance and  most important decisions of life, you should never let go of any question that comes in your mind, however irrelevant it may sound. Answering them will take you a step ahead towards clarity and make you focus on your goal with a better understanding. The same goes for choosing an apt life insurance policy and asking the following questions could help you steer clear of the confusions.

Is the agent certified or qualified enough to suggest a life insurance policy?

The first thing to check about a life insurance agent is his Agent License Number and its date of issuance and expiry. Go through the necessary details about the agent's certification and expertise in the field of providing consultancy services for life insurance policies. Check his number of years of experience and also enquire whether he is a full-timer or are working part-time in this profession. Keep a record of details like the contact numbers of his reporting managers and the insurance company he is working for. Don't hesitate to ask him questions regarding various clauses and terms regarding the policy as this would help you assess his depth of knowledge and confidence about the same.

What are your current and future financial goals and needs?

The next most important question to answer is regarding your financial goals and requirements, which determine your current and future decisions. Before buying a life insurance policy, it is important to answer all questions associated with your idea of financial security and wealth creation needs. Make sure that your life insurance policy offers to help you achieve your financial goals for you and your dependents in the long run. It is also important to assess whether you can afford to purchase the policy and pay the  premiums to reap the benefits of the plan. Hence, find answers to questions related to your annual income, expenditure, assets and liabilities, loans and additional debts, before you buy a full-term life insurance policy.

What kind of policy do you require?

As soon as you decide about insuring your life and securing your family's future, ask the life insurance agent about the various types of life insurance policies available in the market. There are policies like term insurance, endowment insurance, whole life insurance, money back policies, children's plans, ULIPs, Pension Plans and Riders; you need to evaluate the benefits and clauses of each policy to understand whether it would suit your financial needs and requirements or not. Ask your life insurance agent about the differences between the policies and their advantages and limitations. It is expected from the insurance agent to tell you about the wide range of life insurance products provided by the company.

Apart from these, you would also require to ask questions regarding the rate of premium, minimum lock-in period, components covered in the life insurance policy, the amount of sum assured in the policy that you are supposed to get at the end of the term and any other aspects involved in the policy.