Would you be able to cover the repayments on your home loan if your spouse or dependant passed away or became ill?
According to new CommBank research, a third of Aussies said they’d only be able to cover up to six months worth of repayments should the situation arise.
More than half of homeowners surveyed confessed to not had a conversation with their partner over how they would cover ongoing repayment costs should the unthinkable happen, while a third of respondents said they didn’t totally understand the details of their home loan.
45% said they would have to seek out financial assistance to meet their repayments, with that number jumping to 55% if the household had children under the age of 18.
And of those who said they would require financial assistance, two fifths said they would turn to family and friends for financial support.
RELATED: Is 2020 the year you should take out life insurance?
In an effort to ease this potential financial strain, CommBank launched its new Home Loan Compassionate Care Protection on Monday.
The scheme provides complimentary support for owner-occupiers by paying their monthly repayments for up to 12 months in the event their spouse or dependant passes away or is diagnosed with a terminal illness.
“We know that mortgage repayments are the single biggest financial commitment for Australian homeowners, so when the unthinkable happens we’ll support our customers by making their home loan repayments for around 12 months at no cost,” said Group Executive Retail Banking Services, Angus Sullivan.
Sullivan went on to say that aside from being totally free of charge, the protection was also developed with a customer-first attitude.
“In designing this protection, we’ve made sure there’s no need to sign up or to activate it. We’ve also consulted with our own employees who have gone through similar, difficult experiences to ensure the end-to-end claims process is as easy and stress-free as possible, and a dedicated team has undergone specialised training to handle these sensitive matters.”
What other forms of financial assistance are available?
Having access to a financial backstop, like the Home Loan Compassionate Care program, could deliver peace of mind to your loved once however, in most cases it would only covers one aspect of your regular monthly expenses, so it might be worth exploring other options.
For instance, income protection insurance replaces your regular income temporarily if you become sick or injured and are unable to work. Generally, you’ll be able to claim up to 75% of your gross income from the last 12 months, which can then be put toward covering living expenses for your family.
On the other hand, life insurance pays out a lump sum payment to your family if you were to pass away. This payment can be put toward funeral expenses, living costs and of course, paying off your mortgage.
So if you’d like to find out more about life insurance policies and how much cover your family could receive, head on over to our life insurance comparison tool.