Protect yourself with Financial Repayment Insurance
If you ever feel worried or anxious about your financial situation, you’re not alone. When Finder surveyed customers, they found that 72% of people said they were somewhat or extremely stressed with their current financial situation. And getting sick or losing your job, would only compound financial stress, especially if you have loan repayments that need to be made.
That’s where Financial Repayment Insurance comes in. This type of insurance is designed to help you cover the cost of loan repayments if the unexpected happens and you struggle to make your repayments.
What is Financial Repayment Insurance?
If you have a home loan, personal loan, car, or motorcycle loan you’ll likely be paying monthly repayments for the life of the loan. But how comfortable would you be to keep paying the monthly repayments if you were to become sick, injured, or lose your job?
That’s where eric’s Financial Repayment Insurance can help. It can provide monthly payment relief towards a loan in the event of:
- Sickness, injury, or illness;
- Involuntary unemployment due to redundancy, retrenchment, or your employer ceasing to operate;
- Insolvency (if you are self-employed); and
- Pregnancy complications prior to your scheduled maternity leave or which extend past the end of your maternity leave.
What kind of loans can be covered?
Financial Repayment Insurance can cover repayments for:
- Personal loans
- Home loans
- Car loans
- Motorcycle loans
As long as the loan or finance contract is with a registered Australian finance provider and the loan requires monthly payments, Financial Repayment Insurance is an option.
What are the benefits?
If you’re unable to work due to the reasons above for a period of more than 21 days, you can make a claim under your Financial Protection Insurance policy. The policy will then provide monthly payment relief, up to a maximum of $4,000 per month for up to 6 months per claim.
For example, if you had a home loan with monthly repayments of $2,489 (the average monthly mortgage repayment in Australia according to Canstar) your policy would cover you for $14,934 over 6 months. That’s nearly $15,000 you don’t have to pull from your savings or find some other way to pay for while you’re out of work.
Here are some examples where Financial Repayment Insurance paid off for eric Insurance clients.
An unexpected redundancy
You come into work on what you think is a regular Monday, only to learn that your role has been made redundant and your employment will end in 14 days. Instead of panicking, you lodge a claim with eric insurance, as you’ve taken out a Financial Repayment Insurance policy for your car loan for $623 per month…
You continue to job hunt for a period of 4 months. Luckily you don’t have to worry about paying back your car loan during this time. Following your initial 21 day claim-free period of unemployment, eric Insurance pays your financier the four monthly repayments of $623 each. The total claim payment made by eric during your unemployment is $2,492, letting you breathe a bit easier as you settle into your new role.
An unexpected injury
You don’t think of yourself as a clumsy person, but a puddle of water on the stairs gets the better of you. Six months after buying your property, your doctor says you can’t go back to work for an undetermined period while you recover from your injuries. You remember that you took out eric’s Financial Repayment Insurance and the first thing you do when you’re back from the doctor is to lodge a claim with eric insurance.
Following your initial 21 day claim-free period, eric insurance makes payments to your financier equal to your usual monthly repayments of $1,875.50 for each month you’re unable to return to work. After your fifth monthly repayment, your medical practitioner advises that you will be able to return to work in 15 days. eric Insurance adjusts the payment for the following month based on the medical certification and pays 15 days of your monthly repayment.
The total claim payment made by eric to your financier is $10,315.15, meaning you didn’t have to dip into your emergency funds for loan repayments, and can save that money for your recovery instead.
Who might be interested in Financial Repayment Insurance?
Financial Repayment Insurance can benefit anyone who has a loan that they’d struggle to service if they could no longer work for a period of time.
Life is unpredictable, and bad luck can strike anyone, no matter your age or circumstances. Whether it’s experiencing illness, injury, or losing your employment, the last thing you want to worry about is paying off a loan.
That’s why eric Insurance offers Financial Repayment Insurance. There’s nothing more important in your own life than you, and our policy is designed to take away the stress of your financial obligations in tough times.
Want to find out more about Financial Repayment Insurance and if it’s right for you? You can read more and get a quote on our Financial Repayment Insurance page.
Disclaimer: Financial Repayment Insurance is issued by Eric Insurance Limited ABN 18 009 129 793 AFSL 238279 (eric). For full terms, conditions, exclusions, and key factors that influence the cost, please refer to the Product Disclosure Statement (PDS) and Target Market Determination (TMD) on our website. This article may contain general financial product advice that does not take into account your personal financial circumstance. A 21-day cooling-off period applies.