What’s the difference between life insurance and loan or mortgage protection insurance?
Loan protection insurance is offered by a few companies and generally only covers loan repayments if you’re unable to work or if you pass away.
On the other hand, life insurance and income protection provide further options to protect your lifestyle not just your loan.
More Flexibility with Life insurance
At Lifebroker we can help you find protection for your loan or mortgage in the form of life insurance, income protection or a combination of both. With life insurance the amount of cover you can select can be unique to your personal situation. Loan protection insurance does not offer this flexibility as usually the maximum amount of cover available is equal to the loan amount or lower. Life insurance also allows you to nominate a beneficiary who will receive the benefit if you pass away. Depending on your level of cover, this can be more than the remaining loan or mortgage amount, which can be a huge financial help to your family.
Income protection also provides peace of mind
Generally income protection also offers a more flexible option than that of loan protection insurance. Income protection insures up to 75% of your annual income in the event that you are unable to work due to any sickness or any injury for an extended period. If claimed the monthly benefit is not restricted to paying your mortgage or loan repayments, but it can also assist in paying for medical expenses and other daily living costs.
The main difference between loan protection insurance and life insurance or income protection is flexibility. These products can provide additional choices when protecting your lifestyle and family.