The role and importance of life insurance has long been acknowledged as a vital form of protection helping Australians feel secure.

When your life changes, so can your insurance needs. That’s why you need to take important steps to ensure that you are covered and that your life can run effectively, should the unexpected occur.

If your home is one of your family’s largest assets, it’s likely that also means it’s your largest financial responsibility. Being aware of the level of cover you have in place, especially if a mortgage is involved, can provide a lifetime of coverage that can adapt to your ever-changing lifestyle and needs.

Research from the Australian Institute of Health and Welfare found 35 per cent of Australian households have a mortgage, so for millions of Australians and their families, having a financial security blanket in place should you suddenly become ill or injured has never been more important.

There are a wide range of life insurance products and I’ve outlined how some of them can help you protect your life and your mortgage in different ways.

How can income protection help cover your mortgage?

Income protection can provide an alternative source of income if you’re unable to work due to an illness or injury that has left you either partially or totally disabled.

Income protection insurance is typically paid out in monthly instalments. So, if you’re needing to take a prolonged amount of time off work to return to your best health, it can help to relieve the financial pressure and stress that comes with making mortgage repayments.

A monthly payment for a nominated period of time, up to 75 per cent of your income, can help you keep your household up and running and provide for your loved ones while you recover.

How can trauma insurance help cover your mortgage?

Trauma or critical illness insurance can cover you if you become critically ill or injured and require extensive medical treatment to recover.

When on claim with a trauma insurance policy, it’s likely you’ll receive a lump sum payment which can help you when you need it most and give you peace of mind that it can be used for medical expenses as well as putting an amount towards your mortgage repayments while you’re focused on your recovery.

How can total and permanent disability insurance (TPD) help cover your mortgage?

If you become permanently disabled due to an unforeseen accident or illness and are unable to work, TPD insurance can also provide you with a lump sum payment in addition to any Income Protection or Trauma benefits. This payment can be used to access medical and rehabilitation treatments and can also contribute towards paying off your mortgage.

This can hugely help to alleviate any financial pressure that comes with no longer receiving a constant income, allowing you to focus on what’s most important – your health.

Home is where the heart is

At the end of the day, everyone’s circumstances are unique; no one has the same life story or medical background. We all need to recover in different timeframes and the reality is that an unexpected illness or injury tends to require a considerable amount of time off work or potentially even means that you’ll never be able to work in your role again.

Having the right financial support in place will allow you to concentrate on your recovery and give your family peace-of-mind for the future, that they can continue living in their home even if the unexpected occurs. If you feel it’s time to get life insurance in place, you can get in touch directly with an insurer, your superfund, or with your financial adviser who will be able to guide you through the process.

This article was written by TAL head of financial health Jo Hetherington and republished with permission.