1 in 2 Australians with home loans worry about serious illness and the mortgage stress it would cause

• 46% of mortgagees have concerns about a serious diagnosis in the future

• Cancer tops the concerns for 35% of women and 31% men

• 12% are unable to make loan repayments, even for a month, if unable to work due to illness

 
With three of the major banks increasing their interest rates this month, new research reveals one in two (48%) Australian mortgage holders are concerned a serious illness diagnosis at some stage in their lives would impact their ability to service their mortgage. One in five (20%) rank a serious illness diagnosis as their number one concern among factors that could prevent them from paying off their home loans.

The research – a survey of a nationally representative sample of 1,000 Australian adults – was commissioned by ALI Group and conducted by an independent research agency .

ALI Group is a leading provider of loan protection products for Australian mortgage holders, and has paid out more than $25 million to date to hundreds of Australians with serious illnesses.

An estimated 897,000 Australians undergo treatment for serious medical conditions annually . This includes chemotherapy or a cancer-related treatment (about 250,000 patients), stroke (68,000), heart failure and cardiomyopathy (79,000) and cardiovascular disease (500,000). About 54,000 Australians suffer a heart attack annually.

A large portion of Australians would be unprepared to pay for medical expenses or their mortgages if they are diagnosed with a serious illness that would prevent them working, considering that an estimated 4.6 million Australians have a mortgage , and that Australia is the 16th most underinsured nation in the developed world.

The survey results also reveal cancer was the illness that concerned survey respondents, against stroke, heart attack, or other cardiac disease. The results found that 35 per cent of women and 31 per cent of men have worried about getting cancer. For under 30s, cancer is a concern to 34 per cent of respondents, jumping to 66 per cent for those in their 30s and 40s.

The survey further asked respondents how long they could service their mortgage if they had to take time off work for treatment of a serious illness. Thirty per cent of respondents admitted they could not service their mortgage for more than two months, and 44 per cent said they could not service their mortgage for more than three months. The figure is over-represented among under 30s, 36 per cent of whom could not make mortgage repayments for more than two months and 53 per cent of whom could not for more than three months. About one in 10 (12%) would not be able to meet their mortgage repayments even for a month if they suffered a critical illness and had to take time off work for treatment.

Huy Truong, CEO of ALI Group, says: “It is estimated that 134,174 new cases of cancer will be diagnosed in Australia this year alone . More than 12 million Australians will be diagnosed with cancer by the age of 85 and, currently, more than 86,000 people diagnosed with cancer every year in Australia are still living five years after a cancer diagnosis . We are surviving cancer more because of early detection and treatment, and we should be able to focus on recovering, not adding, unnecessary stress to our bodies by worrying about losing our homes.

“It’s interesting that our survey results indicate Australians seem less concerned about a heart attack, despite one Australian suffering a heart attack every 10 minutes. Across the states, Northern Territory residents worry most about getting cancer (45% of respondents), followed by West Australians (38%). South Australians worry about suffering a heart attack most (16% of respondents in that state) and Tasmanians are most optimistic about their health, with 70 per cent not worried about getting a serious illness at all.

“The reality is that many Australians are living pay check to pay check, which is echoed in this research,” says Huy. “With high mortgage levels, Australian homebuyers need to be aware of their financial vulnerability due to serious illness, and should look for ways to protect their mortgage repayments in the event of illness. We shouldn’t be forced to lose our homes when life gets in the way.”

ALI Group’s Loan Protection Plan premiums start at $9.56 per week for a $300,000 loan (18-year-old male, non-smoker). Its average policyholder is 35 and pays $10.49 (female) or $12.54 (male) per week (for a non-smoker) on a $300,000 loan.

ENDS

For more information, please contact:

Alannah Green | +61 2 9279 3330 | +61 401 450 600 | [email protected]

About ALI Group

ALI Group is the leading distributor of loan and mortgage protection to Australian home and property buyers. Its mission is to protect all Australian home and property buyers from financial hardship and as of July 2016, it has protected more than 160,000 Australians against death and terminal illness, serious medical conditions (such as cancer, heart attack and stroke) and involuntary unemployment – with almost $42 billion provided in cover and almost $65 million paid out in claims. There are more than 3,500 brokers authorised to offer ALI Group’s Loan Protection Plan and it has partnered with key aggregation groups such as Aussie Home Loans, Mortgage Choice, Loan Market and Connective. ALI Group’s loan protection product is underwritten by Hanover Life Re of Australasia Ltd ABN 37 062 395 484 (Death and Terminal Illness and Living Benefit) and QBE Insurance (Australia) Limited ABN 78 003 191 035 AFSL 239545 (Involuntary Unemployment Benefit). For more information, visit aligroup.com.au. Australian Life Insurance Distribution Pty Ltd ABN 31 103 157 811 AFSL 226403.

¹ Pureprofile survey of 1,000 employed Australian mortgage holders conducted in November 2016.

² Figures collated from the Australian Institute of Health and Welfare (AIHW), 2014 (its latest research): http://www.aihw.gov.au/australias-health/ and The Heart Foundation, 2016: https://www.heartfoundation.org.au/about-us/what-we-do/heart-disease-in-australia

³ AIHW, 2014: http://www.aihw.gov.au/australias-health/

⁴ The Heart Foundation, 2016: https://www.heartfoundation.org.au/about-us/what-we-do/heart-disease-in-australia

⁵ Roy Morgan, 2016: http://www.roymorgan.com/findings/6989-over-300000-mortgage-holders-have-no-real-equity-in-their-homes-201610061000

⁶ Lifewise, 2016: http://www.lifewise.org.au/about/underinsurance-a-problem-in-australia

⁷ AIHW, 2016: http://www.aihw.gov.au/WorkArea/DownloadAsset.aspx?id=60129558549

⁸ Cancer Council Australia, 2016: http://www.cancer.org.au/about-cancer/what-is-cancer/facts-and-figures.html