What type of insurance to consider when buying a home

Getting into the property market is a goal many Australians have. When committing to purchasing a home or investment property, it's good to understand what types of insurance you may need.

The importance of insurance

So you've bought a property, and may be wondering what type of insurance you should consider.  Most of us know about home and contents insurance. Contents insurance covers household items and personal belongings in the event they are lost, stolen or damaged, while home insurance covers the cost of repairing or replacing your home if it’s damaged.

If you've purchased an investment property, you may want to think about landlord insurance. This type of cover is specifically designed to protect your investment property from loss or damage when renting out your unit, apartment, or house. Landlord insurance can protect you against insured events that lead to damage to your investment property and a loss of rental income.

But what insurance exists if you are unable to make your home loan repayments through illness, injury or death?

Life insurance, trauma and income protection insurance are three types that help protect you in this event. Life insurance provides a lump sum payment to your dependants in the event of your death, and this payment can be used to help them pay the mortgage. If you suffer a critical illness or injury, trauma insurance will also pay out a lump sum, while if you're injured or ill and cannot work for a length of time, then income protection insurance provides a monthly payment to cover part of your salary for a limited period to help meet regular expenses, such as mortgage repayments. Some income protection insurance products may also pay you benefits if you involuntarily lose your job.

Can insurance pay off a home loan?

Yes! Mortgage protection is a type of insurance that can cover home loan repayments should you become unable to work due to illness or injury, become involuntarily unemployed or pass away.

ANZ offers this type of insurance solution for its home loan customers that combines aspects of life insurance and income protection into one package: ANZ Home Loan Protection. This optional product helps to reduce worries you may have about what could happen to your ANZ home loan if you ever get sick, injured, lose your job, or unfortunately die.  

By combining ANZ Home Loan Protection  with other insurances, such as contents and building insurance, you will have a high level of protection for your house and what's inside it, as well as added comfort knowing you can continue to meet mortgage payments if something unexpected happens to you. 

What does ANZ Home Loan Protection provide?

ANZ Home Loan Protection offers three options that can help cover your mortgage repayments or pay off your loan: repayments cover, life cover, or both.

• Option one pays the outstanding balance of your loan if you unexpectedly pass away, 
• Option two covers your minimum monthly home loan repayments if you unexpectedly lose your job, or can't work due to illness or injury  
• Option three combines options one and two.

Some of its features includes:

• It's easy to apply for and doesn't require any medical or blood tests. It does not cover pre-existing conditions.^disclaimer
• It's flexible, offering three types of cover: life benefit only; illness, injury and involuntary unemployment benefits only; and full cover, which combines all benefit types.
• You only pay for what you need. Your amount of cover will match the total outstanding balance of your ANZ home loan. This means that as the loan mortgage balance decreases each month, so does the amount of cover you pay for. 

While none of us ever plans for anything unfortunate to happen to us, we don't know what the future holds. It's crucial to protect your home by not only insuring against damage to its physical structure or theft of your contents, but also against factors that could impact your ability to maintain your future mortgage repayments.