According to the statistics from Legal & General Mortgage Club, 34% of their consumers who’ve purchased their mortgage direct from a lender have no protection policy in place, such as critical illness cover (CIC), life insurance or income protection.
The new research has also included a survey of over 2,000 UK homeowners, revealing that 5% of respondents who hadn’t used an adviser didn’t even know if they had a policy. Therefore, they could potentially be missing out on the financial support of protection in the future If they unknowingly had insurance and didn’t claim.
Furthermore, 51% of those surveyed had taken out a life insurance policy, however, the figures for CIC were even lower. Even though the figures from Cancer Research UK claims that one in two people in the UK will be diagnosed with cancer in their lifetime. While homeowners who didn’t take the advice had a critical illness policy which 17% of them had taken out.
According to Legal & General’s Deadline to Breadline research, it reveals that people could last just 32 days on their savings if a long-term sickness meant that they couldn’t work. In addition to this, 17% claimed that they had an income protection policy in place despite this.
The research also revealed that these homeowners were also highly aware of the risks, with 35% of respondents going directly to a lender with their mortgage. They claimed that the most vital thing to protect when taking out a huge financial commitment was their family’s financial security if they died. This was then followed by 29% who said their biggest worry was their own or family’s financial security if they couldn’t work.
In addition to this, the research also discovered that advisers were championing protection in their conversations with borrowers who had taken advice. The 62% of customers that have used a mortgage adviser had been recommended life insurance, 33% cover against serious illnesses and 29% income protection.
Legal & General Mortgage Club wants to utilise the research to highlight the vital role advisers play in mortgage applications, therefore helping borrowers to find a suitable mortgage and think about the protection they need to secure their finances should the worst happen. However, previous reports from Legal & General revealed that borrowers who used a mortgage adviser were also majorly in favour of doing so again. Almost all (98%) said that they found the support of a mortgage adviser ‘valuable’ and a further 95% claim they would recommend using a mortgage adviser to family or friends.
About Stuart Mosley
Stuart Mosley (CeFA, CeMap, CLTM) founded SJ Financial Solutions in June 2005 having spent 12 years with big corporates such as Halifax and Santander. He felt the personal touch and straight speaking was missing from financial and mortgage advice services and set up SJ Financial Solutions to change this.
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