A growing number of homeowners are neglecting to adequately protect themselves in the event of financial difficulty, according to recent research by Legal & General.
The survey revealed that 40% of parents of under 18’s have no life insurance in place, and that two thirds have no Critical Illness insurance either.
“These figures, whilst not surprising, are certainly worrying” said Taj Kang, Business Development Director at Contractor Mortgages Made Easy. “It is perhaps unsurprising that nearly half of those with life insurance say that they cannot afford it, given the increased cost of living, however what is worrying is that a fifth said they didn’t need it.”
The fallacy of insurance companies looking to avoid paying claims has also been dispelled this week, with the news that protection providers paid out a total of £3.4bn in 2014.
“We hear from a lot of clients that consumer confidence in protection companies is low. This is largely due to the impression created from media stories in this area as, naturally, bad news sells better than good news” adds Taj.
“These figures show that 97.7% of all types of protection policy claims are paid, so the myth of insurers looking for loopholes is just that.”
The pay-out figure is up from 2013’s figure of £3.1bn, and shows that the average pay-out from a protection policy has fallen slightly to £26,813, down from £31,140 the year before.
The Association of British Insurers say that a total of 131,543 claims were made in 2014, up a staggering 28% on 2013, due in part to an increase in claims for Whole of Life policies.
“When comparing the costs of home ownership, many look no further than mandatory payments for things like Stamp Duty and legal costs, and comparing mortgage interest rates” said Taj. “In reality, the cost of protection should be considered alongside this, as the consequences of not fully protecting yourself are potentially catastrophic.”
“How much home insurance would you buy if your house was on fire? The answer is likely to be ‘as much as possible’ but unfortunately failing to adequately protect your family is a very dangerous game.”
“We impose upon our clients the need to protect not just themselves, but their families. After all, if you had a machine in the corner continuously printing money equivalent to your day rate, you’d insure that against breakdowns if you could, so why not yourself?”
Media Contact: Raman Kaur, Public Relations Manager
Tel: 01489 555 080