The cost of living is increasing at a rapid rate and many of us can see this clearly in our day to day lives with things like groceries, interest rates and petrol. But there are a lot of hidden things which inflation is affecting too…
One of these things is your mortgage protection insurance policy. Some policies include an adjustment for inflation while others don’t, so it’s best to check with your insurance advisor to see which policy you have.
If your policy does include inflation adjustments, this means that the sum you are insured for will keep pace with inflation and you will receive the same value from your policy as the time passes. This is the ideal scenario to ensure you don't get caught short.
If your policy doesn’t include an inflation adjustment, then you may find yourself with a lack of cover should something happen. With mortgage rates continuing to rise, having the inflation adjustments on your policy can ensure you are covered with the mortgage rates rise and this gives you peace of mind. However it's important to keep in mind that with this increase in cover, naturally the premiums also increase too.
Let’s take a look at an example. If you are insured for $3,500 per month and have opted for the inflation adjustment, then your sum insured on your policy will have risen to $3,752 when your policy renews. This ensures you keep up with inflation and have an additional $252 in cover per month, without having to be re-examined for additional cover with your insurer.
If you are unsure whether your policy contains an inflation adjustment, or you would like to look at taking out a mortgage protection policy, then get in touch with Samrita Sachdeva, our Insurance Advisor here at Better Choice. She will help you work out a policy that suits your needs, and ensures you have the right level of cover for your situation. Contact her on 022 598 2457 today.