UK Home Insurance News

Monday, April 25, 2005

 

25% of homeowners without mortgage protection

A survey commissioned by Friends Provident has revealed that nearly a quarter of homeowners in the UK admit that they don't have cover to pay off their mortgage debts in the event of their death - and, among first time buyers, this shortfall is soaring.

And despite almost three quarters of property owners (72%) without adequate cover admitting that they'd lose their home in the wake of family tragedy, the average payment for term assurance is just £2.10 per week - the price of a pint.

According to the research commissioned by Friends Provident, the top reason for not having cover was a belief that it is an unnecessary expense. Nearly a third of people without life insurance (31%) said they didn't need term assurance while almost one in three (30%) revealed they would find it difficult to meet the payments. One in ten homeowners (11%) admitted they were willing to gamble with their family's financial security while 5% pleaded ignorance to the mortgage protection product.

And in spite of the capital's inflated property prices, Londoners are the least likely to have term assurance (30% not covered) while Scots are the most likely to have organized cover to pay off mortgage debts. (only 14% not covered). For those who had taken out cover, more than one in ten (11%) homeowners admitted that their term assurance was not sufficient to pay off their mortgage debt in the event of a breadwinner's death. Despite mortgages being the single biggest financial commitment of our lives, almost half of those surveyed (48%) confessed that they'd failed to seek independent financial advice to ensure that their life assurance was linked to their mortgage.

Peter Hamilton, head of protection at Friends Provident, said: "Most people are happy to insure their house, its contents, their car, travel plans or mobile phone but often give little thought to insuring the income that pays their mortgage and funds their lifestyle. Death, long term sickness and disability are subjects that most of us would rather avoid discussing. Life assurance cannot lessen the emotional impact of such events but it can soften the financial difficulties should the worst happen."

posted by UK Insurance Index  @ 4:19 PM

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