Low interest rates have motivated many of us to take on the responsibility of a mortgage. With your mortgage comes a long term commitment to the lender and a tight grip on your finances for a good number of years to come. To add to your increasing frustration the concept of not knowing what your Life Insurance premiums will be in future does not help planning. So, is it possible to obtain long term premium certainty on Life Insurance?
New Zealand property market is red hot. A recent article in the New Zealand Herald entitled “Reinz figures: The three factors leading to record house prices and volumes” dated 13 October 2020, provides insight into the current surge in the market we are experiencing.
Meanwhile the ongoing struggle continues in the housing sector, supply versus demand. Without a doubt you are going to want to keep the ideal family home once you have concluded your search. It is important to note the retention of your family home has two main threats. Firstly an unforeseen and sudden change in your family income. Secondly an escalation in your family monthly expenses. Most importantly keep in mind your current mortgage repayments are calculated at a record low interest rate destined to change.
Considering the average New Zealand households uses 32% of the household income to cover mortgage repayments as per goodreturns.co.nz. Unquestionably your increasing Life Insurance premium will have you contemplating cancelling your insurance. Alternatively, you could fall into the category of people deciding to refrain from having Life Insurance altogether.
Furthermore although your Life Insurance pays out a lump sum payment on the untimely death of you or your loved one. The funds will provide you options to either settlement or reduce of the outstanding mortgage leading to the retention of your family home.
We have good news for you! Long term affordability of Life Insurance is achievable.
Level premium gives you the opportunity of taking Life Insurance and freezing your premium for your chosen duration of time. You can choose to level your premiums for 10 years, to age 65, to age 85 and even 100.
Finally you can ensure long term premium certainty by leveling your premiums on your Life Insurance.
Set up an appointment with your adviser today to discuss and discover the best option for you.