The Plan Your Spouse Thinks You Already Have
If your Mortgage Repayments rely on two incomes, what happens when one income is gone?
As a risk insurance specialist, I see all too often hard working Australian families, who seemingly have doing everything right - juggling two incomes, a home to call their own, yet they're walking a financial tightrope daily that they see as simply, the 'new normal' and feeling powerless to protect themselves from it's very real risks.
Read in this article
- The Most Dangerous Assumption Threatening Your Family Home
- The Heavy Weight of 'What If'
- The three primary family stressors we see
- The Champion's Burden: Who Starts the 'Tough Conversation'?
- Why Do We Avoid Hard Conversations? The Real Psychological Barriers
- So where can you go from here?
- From Anxiety to Action: Building Your Plan B
- 4 Practical steps you can take today
- FAQ's
- "We've both got life insurance inside our superannuation funds. Isn't that enough to cover us?"
- "This all makes sense, but with our mortgage and the cost of living, how can we possibly afford another expense?"
- "My partner and I find it really hard to talk about this stuff. How do we even start the conversation without it sounding morbid?"
- "We feel overwhelmed by all the different types of insurance. What is the single most important one for us to have?"
- "We're both young and healthy. Can't we just wait a few years until the mortgage is a bit smaller?"
The Most Dangerous Assumption Threatening Your Family Home
Many Australians remember the devastating lost of lives and homes in the 1983 Ash Wednesday Bushfires in Victoria where 47 people tragically died and over 2,100 homes were destroyed to bushfires. What we don't talk about is how every year, 23,000 Australians a year are disabled and more homes are lost to sickness and disability, than are lost to fire and flood combined.
They're juggling life from inside the throes of a pressure cooker environment we know as mortgage stress - where every dollar is allocated, and the unspoken hope is that nothing ever goes wrong. This is the financial discussion your family needs to have, but likely isn't. It’s a frank conversation for the double-income family navigating the treacherous waters of a hefty mortgage without a safety net.
But what if something does go wrong? What if one of those vital incomes suddenly vanishes due to illness, injury, or worse?
The Heavy Weight of 'What If'
For the dual-income couple with a hefty Sydney style mortgage, but no life or disability insurance to protect it, the stressors are a constant; and it can feel like a low-grade hum beneath the surface of daily life.
Every cough, every near-miss on the road, every headline about redundancies carries an unspoken weight. Driving home from work on one of our Motorways can feel anxiety creating, not just because of the unbalanced toll to speed ratio, but by watching other frustrated drivers pushing their luck (and the limits of mechanical physics) getting into yet another road rage or roadside accident.
The three primary family stressors we see
- The Fragile Financial House of Cards: where your entire financial structure is built on the assumption of two continuous incomes. The loss of one could mean an immediate struggle to meet mortgage repayments .
- The Burden of Sole Responsibility: where in the event of one partner's sickness or injury and incapacity to continue to earn their income, the other is left to carry the entire financial and emotional load. This means becoming the sole breadwinner and potentially a full-time caregiver , at the same time.
- The Threat to Long-Term Goals: where dreams of house renovations (compulsory kitchen makeovers), holidays, or providing for your children's future at a selective school are suddenly at risk. The focus shifts from aspiration to mere survival.
The Champion's Burden: Who Starts the 'Tough Conversation'?
When it comes to the confronting topic of death and disability, who is responsible for championing this conversation and taking the lead?
- Often, there’s a silent, mutual avoidance. It’s a conversation loaded with emotion and a tangible sense of tempting fate. This silence leads to a dangerous assumption, a phenomenon I call 'The Plan Your Spouse Thinks You Already Have in Place'.
- It’s a shared fantasy that somewhere, somehow, a safety net just already exists. One partner might assume the other has it 'handled,' perhaps through their superannuation.
But the default cover in super is often dangerously low, typically insufficient to clear the average Australian mortgage, let alone provide for a family's ongoing living expenses.
Our clients tell us that this unspoken pact between a couple can feel like a fragile shield, and its shattering in a time of crisis is an emotional and financial bombshell going off.
Why Do We Avoid Hard Conversations? The Real Psychological Barriers
The decision to put off getting your Life and Disability Insurance in place often feels purely economic; but the real reasons for decision avoidance is usually more nuanced and deeply psychological.
It's not that you can't afford it; it's that you think this could never happen to you.
The real barrier isn't affordability; it's the deeply ingrained belief in our own invulnerability (and for some even the idea of talking about it might attract it- an odd thought but real for many people).
Here are the most common mental hurdles we see as financial advisors:
Chart: Common Physiological Biases everyone faces
Why We Avoid It: The Real Psychological Barriers
| The Bias | What It Sounds Like | The Reality |
|---|---|---|
| Optimism Bias | "It'll never happen to us. We're both young and healthy." | 1 in 5 families will face a serious illness, accident, or death of a parent during their working years. |
| Present Bias | "We desperately need that money for bills and school fees right now." | The immediate pain of paying a premium consistently outweighs the abstract future benefit of security. |
| Loss Aversion | "It's just wasted money if we never have to make a claim." | The premium is a payment for certainty and peace of mind, not just a potential payout. |
| Complexity Avoidance | "It's all too complicated... I'll look at it later." | Faced with overwhelming information, the easiest mental path is to do nothing. |
This combination of psychological biases is a direct cause of Australia's severe underinsurance gap, with an estimated 95% of families lacking adequate protection.
So where can you go from here?
From Anxiety to Action: Building Your Plan B
The path out of mortgage stress and into greater financial security isn't about working harder; it's about working smarter and protecting what you've already built, while your wealth has the time to grow and mature.
4 Practical steps you can take today
- Break the Mortgage Burden Silence: make a dedicated time with your partner for the 'what if' conversation. Put your phones aside and begin with this simple question: "If one of us couldn't work for six months, what would our financial situation look like?"
- Conduct a Double Income Double Mortgage Reality Check: Log in to your superannuation accounts (most now have a smartphone app) and check the level of your default life and disability (TPD) insurance you hold. Is it enough to cover your $842,000 average mortgage and ongoing expenses? For most, it's a fraction of what's actually needed to pay out mortgages and clever at least two years of family income.
- Understand the Financial Tools to Use: A financial safety net is built from a combination of financial tools designed to protect people against different events.
Chart: Types of Financial Tools that can protect Mortgage Debt & Family Incomes
Understand the Financial Tools to Use
A financial safety net is built from a combination of tools designed to protect people against different events.
| Type of Insurance | What It Does (The Problem It Solves) |
|---|---|
| Life Insurance (Death Cover) | Protects your family's financial future if you die, ensuring debts like the mortgage can be cleared and your loved ones have funds to live on. |
| Total & Permanent Disability (TPD) | Protects your financial future if you suffer a career-ending illness or injury and can never work again. |
| Trauma Insurance (Critical Illness) | Protects your finances during a major health crisis, giving you breathing room to recover without financial stress. |
| Income Protection | Protects your regular income stream if you are temporarily unable to work due to any illness or injury. |
- Start to Use Professional Guidance: A Sapience Financial risk insurance specialist can help you navigate the complexities of life and business and create solutions that fit your budget and expectations. We’re the helpful but neutral third party to facilitate the conversation with your partner.
Pro Tip: One thing many folks don't know is that most personal insurance premiums can be paid automatically from a super fund once a year, so it's more a choice you make, rather than a monthly personal cost you have to bear.
The conversation about life and disability insurance isn't about focusing on the worst-case scenario; it's about empowering your family to face the future with confidence.
Don't let the unspoken gamble dictate your family's future. It's time to finally take action today and build your Plan B for your double income mortgage debt, just in case, and then get on with living a bigger, protected life.
FAQ's
Your Mortgage Debt Backup Plan Questions, Answered. Here’s a quick summary of what you need to know about The Double-Income Tightrope: What's Your Plan B for the Mortgage?
"We've both got life insurance inside our superannuation funds. Isn't that enough to cover us?"
That’s a great question, and it's one of the most common—and dangerous—assumptions I see. Think of the default insurance in your super as a generic, off-the-shelf safety net; it’s certainly better than nothing, but it was never designed for your specific situation.
The reality is that this default cover is often dangerously low, sometimes only a fraction of the average Australian mortgage. It's rarely enough to clear a significant debt, let alone provide for your family's ongoing expenses for years to come. Relying solely on it is a classic case of The Plan Your Spouse Thinks You Already Have in Place. The first real step is to log in to your super accounts and see what you’re actually covered for. It’s often a sobering reality check.
"This all makes sense, but with our mortgage and the cost of living, how can we possibly afford another expense?"
I hear this a lot, and I completely understand the pressure. Every dollar is accounted for. But the conversation we need to have isn't just about affordability; it's about priority and perspective. For most dual-income families, the monthly premium for adequate cover is often less than their streaming subscriptions, daily coffees, or a single dinner out.
The real barrier isn't the cost; it's the deeply ingrained psychological hurdle of Optimism Bias the "it'll never happen to us" syndrome. We aren't insuring against a certainty; we're investing in peace of mind and guaranteeing our family's future. The real question isn't "Can we afford this premium?" but rather, "Could our family afford to lose an entire income and still keep our home?"
"My partner and I find it really hard to talk about this stuff. How do we even start the conversation without it sounding morbid?"
You’ve hit on the biggest roadblock for most couples. It’s an emotionally loaded topic, so the key is to reframe it. Don't frame it as planning for death; frame it as planning for life to continue.
Schedule a specific, calm time—a "financial date night"—free from distractions. Start by talking about your shared goals: keeping the house, the kids' education, a secure future. Then, you can introduce insurance not as "death cover," but as goal protection. It's the tool that ensures all your shared dreams are protected, no matter what life throws at you. It stops being about a worst-case scenario and becomes about empowering your family to live a bigger, protected life.
"We feel overwhelmed by all the different types of insurance. What is the single most important one for us to have?"
That's a bit like asking a mechanic what the most important part of an engine is—they all work together to keep the car moving. Your financial safety net is the same; it's a system. However, if I had to point to the one that protects against the most statistically likely event, it would be Income Protection.
Think about it: your ability to earn an income is your single biggest financial asset. It pays for the mortgage, the bills, everything. An injury or illness that stops you from working, even temporarily, can derail everything. Income Protection is designed to keep the money flowing while you recover, giving you the breathing room to get back on your feet without financial panic. It protects your present, so you can plan for your future.
"We're both young and healthy. Can't we just wait a few years until the mortgage is a bit smaller?"
That's the ultimate gamble, isn't it? It's betting your family's home on the assumption that nothing will go wrong in the meantime. The hard statistical reality is that one in five families will be impacted by the death of a parent or a serious illness that leaves them unable to work during their lifetime.
The irony is that the best time to get insurance is when you are young and healthy, as it's at its most affordable and accessible. Postponing the decision doesn't just leave you exposed; it almost guarantees you'll pay more for it later, or worse, find that you're no longer able to get it at all. Building your Plan B isn't something you do when you're old; it's something you do to ensure you have the chance to get there.
Call us today on 1300 137 403 or email us here for a no-obligation private chat about your situation.
Drew Browne is a specialty Financial Risk Advisor working with Small Business Owners & their Families, Dual Income Professional Couples, and diverse families. He's an award-winning writer, speaker, financial adviser and business strategy mentor. His business Sapience Financial Group is committed to using business solutions for good in the community. In 2015 he was certified as a B Corp., and in 2017 was recognised in the inaugural Australian National Businesses of Tomorrow Awards. Today he advises Small Business Owners and their families, on how to protect themselves, from their businesses. He writes for successful Small Business Owners and Industry publications. You can read his Modern Small Business Leadership Blog here. You can connect with him on LinkedIn. Any information provided is general advice only and we have not considered your personal circumstances. Before making any decision on the basis of this advice you should consider if the advice is appropriate for you based on your particular circumstance.
