5 must-knows about home loan protection insurance

Could you keep up with your mortgage repayments if an unexpected life event affected your income?

For many Australians, a home loan is their largest financial commitment. That's why some homeowners choose to explore home loan protection insurance as a way to help manage mortgage repayments if life doesn't go to plan.

Quick answer: What is home loan protection insurance?

Home loan protection insurance is designed to help cover mortgage repayments, or in some circumstances provide a lump sum benefit, if an insured person experiences certain covered events such as death, terminal illness, illness, injury or involuntary unemployment (depending on the cover selected and subject to policy terms and conditions).

Unlike home and contents insurance, which helps protect your property and belongings, home loan protection insurance is designed to help manage mortgage commitments if a covered event affects your income or financial circumstances.

If you're considering home loan protection insurance, here are five important things to understand.

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1. Cover is linked to your home loan balance

One of the key differences between Zurich Home Loan Protection and some other insurance products is that cover is linked to the remaining balance of your eligible mortgage.

For eligible customers, cover is available for mortgage balances of up to $1 million.

Zurich uses Open Banking technology to securely access loan information (with your consent) and calculate premiums based on your remaining mortgage balance.

As your loan balance reduces over time, your premium may also reduce.

Why this matters

Many homeowners want cover that reflects their actual mortgage commitment, rather than selecting a separate amount that may not align with what they owe.

2. Home loan protection insurance is different from home and contents insurance

A common question is: Is home loan protection insurance the same as home insurance?

No.

The two products are designed for different purposes.

Home loan protection insurance is intended to help with mortgage repayments or provide a benefit linked to your home loan if a covered event occurs.

Home and contents insurance is designed to help repair or replace insured property and belongings if they are damaged or stolen due to insured events.

Many homeowners choose to consider both forms of protection because they address different needs.

3. What does Home Loan Protection cover?

One of the most important things to understand when comparing Home Loan Protection Insurance is what types of events may be covered.

Zurich Home Loan Protection offers three cover options:

• Life Benefit

If the insured person dies or is diagnosed with a terminal illness with less than 12 months to live, a lump sum benefit of up to $1 million may be payable, subject to policy terms and conditions.

• Illness, Injury and Involuntary Unemployment Benefit

If you're unable to work because of illness or injury, Zurich may pay your minimum monthly home loan repayment, up to $10,000 per month for up to 18 months, subject to policy terms and conditions.

If you become involuntarily unemployed, including through redundancy, Zurich may pay your minimum monthly home loan repayment, up to $10,000 per month for up to 90 days, subject to policy terms and conditions.

• Full Protection

This combines both Life Benefit and Illness, Injury and Involuntary Unemployment cover.

Why this matters

Different households face different financial risks. Understanding which events are covered can help you decide whether Home Loan Protection Insurance aligns with your circumstances and mortgage commitments.

4. Benefits are generally paid to you, not your lender

Many people assume Home Loan Protection Insurance benefits are paid directly to the bank.

With Zurich Home Loan Protection, benefits are generally paid to:

• you
• a second policyholder (where applicable)
• your estate

rather than directly to your lender. So you can put the money towards your mortgage or towards bills and other expenses.

This can provide flexibility when deciding how best to manage your financial commitments based on your circumstances at the time.

5. Up to two people can be insured against the same home loan

Many Australian households rely on more than one income to help cover mortgage repayments.

With Zurich Home Loan Protection, up to two eligible policyholders can be insured against the same home loan.

This means each person can hold cover linked to the same mortgage, helping provide additional financial support if a covered event affects either person.

For households that rely on dual incomes, this may provide an additional layer of protection if circumstances change unexpectedly.

Why consider Zurich Home Loan Protection?

When comparing Home Loan Protection Insurance, it's important to consider both the cover available and the provider behind it.

In 2026, Zurich's Home Loan Protection team was recognised with the ALUCA Innovation Team Award, reflecting its focus on developing solutions that help Australians manage their mortgage commitments when the unexpected happens.

The bottom line

A mortgage is often one of the biggest financial commitments you'll ever make. Understanding your options can help you decide whether Home Loan Protection Insurance is right for your circumstances.

Protect your home loan with Zurich

Zurich Home Loan Protection is issued by Zurich Australia Limited ABN 92 000 010 195 AFSL 232510 (Zurich). This information does not take into account your personal objectives, financial situation or needs. You should consider these factors and the appropriateness of the information to you. Consider seeking advice specific to your individual circumstances from an appropriate professional. You should also consider the Product Disclosure Statement (PDS) available at www.zurich.com.au in deciding whether to acquire or to continue to hold the product. A Target Market Determination for the products are available here or by contacting Zurich on 1800 022 114.