What is Mortgage Repayment Cover?
A comprehensive mortgage protection plan designed to help pay your mortgage payments in an event of a disability caused due to sickness or an accident.
Benefits of Mortgage Repayment Cover
Mortgage Cover can protect your mortgage payments in the event of illness, disability or involuntary redundancy. Mortgage Cover may assist with payment of your mortgage in the event of permanent disability or critical sickness.
It not only covers claim due to sickness or an accident but also covers mental health problems like, stress, depression, anxiety etc.
Who can have Mortgage Repayment Cover?
People who live in their own houses and have a mortgage can only avail a mortgage repayment cover. It is not available for rental investment properties.
What is covered?
Mortgage repayments to be paid to the bank are covered depending upon the individual’s capacity and the ability to pay premiums.
Mortgage repayment benefit does not have any offsets against benefits like ACC claim, sickness benefit, WINZ benefits received by the insured unlike the Income Protection Cover during the claim period.
Some companies also offer optional Involuntary Redundancy Cover of maximum $2500/- p.m payable up to a maximum of 6 months at an extra cost.
What isn't covered?
Mortgage repayments on rental investment properties.
The Insurance company will not pay any claim if a life assured suffers one of the covered conditions as a direct or indirect result of:
1) Self-inflicted harm including attempted suicide.
2) Participating in criminal activity.
How much Life Insurance is required?
Each individual who guarantees the mortgage can cover 100% of their mortgage commitments to the bank.
Some insurance companies may allow covering 110% of the mortgage payments to the bank.
If one is not able to afford covering the whole mortgage repayment premium, he/she can also partially cover the mortgage repayments.
To keep premiums affordable one may opt to have different wait periods like:
4 weeks
8 weeks
13 weeks
It also has options to chose the payment term from 2 years, 5 years and upto the age of 65.