One in eight home buyers doesn’t talk about their protection needs
Buying property is usually the biggest financial commitment many of us will take on in their lives, and it is an obvious moment to pause and think about our protection needs.
The most common type of mortgage protection usually consists of mortgage life insurance with health insurance and a mortgage payment protection insurance (MPPI). Nobody wants to get into financial trouble, but homeowners should take precautions to continue paying their mortgage if something happens to their main source of income.
Older home buyers most exposed
Relying on savings is not profitable for many and certainly not good for financial resilience. However, one in eight (13%) home buyers who bought their mortgage through a mortgage broker did not speak about their protection needs, according to new research, with older buyers at greatest risk and risk of health problems affecting their income.
The majority (76%) of homeowners discussed protection products at their first session, with life insurance being the most purchased product (57%), followed by a critical illness (36%) and income protection (31%).
Health concerns are more likely to suffer
However, more than one in ten (13%) did not discuss protection at all and rose to a fifth (20%) of those over 55 – although this age group tends to suffer from health concerns. More than one in four buyers who spoke about protection stopped buying (28%), so they remained unprotected.
Of these, 25% refused to take out insurance because they could not afford the premiums because the total cost of buying a home was already high. A slightly lower proportion (19%) felt that they could not afford the costs because the mortgage itself was expensive.
I have not seen the value of protective products
Almost a quarter (23%) did not see the value of protective products, while 18% thought they would never need them. One in seven (14%) wanted to get protection in a different way, but never got around.
Disturbingly, two out of five homeowners (42%) could only cover important bills for up to two months if their household lost their primary income, and another 30% could only last six months. Adequate financial protection is therefore vital to ensure that households can maintain their mortgage payments and keep ownership of their home if they unexpectedly lose income.
Are you prepared for the unexpected events in life?
We can help you protect yourself from financial difficulties when life becomes unpredictable. If you have the right protection, you will get the important financial respite when you need it most. To review your current protection requirements or learn more, please contact Reeves Financial at 01403 333145 or email [email protected]
 Canada Life December 10, 2019
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