MORTGAGE DISABILITY COVERS
Seven Suppliers - Multiple Options
These are similar to Income disability benefits but differ in a number of ways.
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They are not income contracts so normally do not require proof of income at application or claim time.
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However they do require proof of a mortgage at application time and
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Some will only pay the lesser of your mortgage payment or the sum assured whichever is the lesser.
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Some do not require proof of a mortgage at claim time but most are of an agreed nature (if you no longer have a mortgage at claim time IRD may tax the benefit)
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They are typically tax free benefits and the premium should not be claimed as a tax deduction against income (expense- consult accountant).
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They do not offset ACC or ongoing income.
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If you have a mortgage disability contract and a normal Income disability income contract the insurance company may reduce the benefit paid under the disability income plan if the combined benefit is over 75% of income.
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Some companies will allow you to cover up to 150% of your mortgage payment.
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You can select a wait period that suits (2/4/8/13/26/52 weeks etc) and
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You can select a payment term (1/2/5 years, to age 65/70)
We tend to prefer these style of contracts ahead of income disability income contracts, provided the client:
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Has a mortgage of a sufficient amount that they would be financially impacted if the mortgage could not be paid if they or their spouse/partner were disabled due to accident or illness.
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They could survive on the spouse/partners income provided an insurance company paid the full mortgage payment (or a portion).
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You didn't need to insure to your full 75% of income entitlement
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These contract seem to be less complicated and have less "fish-hooks"
If you or your spouse/partner were off work due to an accident or illness and we had an insurance company paying your mortgage payment, would your spouse/partner be able to pay the power, phone etc and "put food on the table"?
Please tell me more about Mortgage Disability
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