According to a new survey commissioned by loan protection services provider ALI Group, 20 per cent of respondents cited contracting a severe medical condition as their main concern when asked for potential factors that could prevent them from servicing their mortgages.
The study found that 30 per cent of respondents could not meet their mortgage obligations for more than two months if they were obliged to take time off work for treatment of a serious medical condition. Meanwhile, 44 per cent would not be able to keep paying their mortgage for more than three months in such circumstances.
According to the report authors, this figure was over-represented among under-30s, of whom no fewer than 36 per cent could not make mortgage repayments for more than two months – while 53 per cent would not be able to do so for more than three months.
About 12 per cent would not be able to meet their mortgage repayments even for one month if they suffered a critical illness and had to take time off for treatment.
Based on a representative sample of 1,000 Australian adults, the study found that some 897,000 Australians are currently being treated for serious medical conditions. These range from chemotherapy or a cancer-related treatment (about 250,000 patients) to stroke (68,000), heart failure and cardiomyopathy (79,000) along with cardiovascular disease (500,000).
With an estimated 4.6 million Australians having a mortgage – and Australia now ranked as the 16th most under-insured developed nation – the survey data indicated that a significant segment of the population would be unprepared to cover medical expenses or pay their mortgages if diagnosed with a serious illness that would prevent them from working.
The study also found that cancer was the illness those polled were most worried about, followed by stroke, heart attack, and other types of cardiac disease.
It found that 35 per cent of women and 31 per cent of men had concerns about getting cancer. For the under-30 demographic, cancer was a main concern for 34 per cent of respondents, rising to 66 per cent for those aged between 30 and 50.
Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.