Manage your credit score and your risks
How to manage your financial risks
Your credit score is all important if you want to borrow money – whether it’s a new credit card, increasing your card limit, borrowing to buy a car, having a holiday or taking out a mortgage to buy your dream home.
But have you thought about how you would manage the risk of repaying the loan if the unexpected happens?
For most Australians, the answer quite often is ‘no’.
Research1 commissioned by NobleOak Life revealed that 60% of respondents would use their savings if they contracted a major illness or suffered an injury and couldn’t go back to work. 16.4% said they would sell the family home and 23.5% said they would sell assets such as investment property.
Life-changing events come in many shapes and forms – from marriage and new babies to losing your job, unexpected illness, accident and serious illness. Different types of Life Insurance can help provide financial security in the event the unexpected happens.
Life Insurance provides a lump sum amount that can help provide your loved ones with financial peace of mind if the unexpected were to happen to you, regardless of whether you are young and single, have a family with a couple of kids, or are heading towards retirement.
Income Protection insurance can assist you in maintaining your lifestyle in case you are suddenly unable to work due to serious illness or injury. After all, your income is your greatest asset and is essential to meeting ongoing financial commitments. Income Protection can pay up to 75% of your pre-tax income after your nominated waiting period has ended (either 30 or 90 days).
People should also understand the difference between Life Insurance and Mortgage Protection Insurance (MPI). MPI is designed to pay off the debt on your property to the lender only. Whereas Life Insurance pays a lump sum to your beneficiaries and can be used to pay off the mortgage as well as used for other living expenses.
Having the right type and level of cover in place can help make sure your loved ones don’t struggle to cover any debts you might leave behind and provide financial security for the longer term.
Don’t forget to review your life insurance every year or when you are applying to increase your level of borrowings. Check out NobleOak to find tailored cover, designed to protect you and your loved ones if life takes a turn for the worse.
Information provided in respect of life insurance has been written in conjunction with NobleOak Life Limited AFSL 247302 ABN 85 087 648 708. This is general advice only and has been prepared without taking into account your objectives, financial situation or needs. Always read the PDS
1 Research conducted by Pureprofile in December 2018 with 1,043 Australian respondents.