Posted on: February 1, 2025
Some scary facts about insurance in the U.K
Here are some scary facts about under insurance for life insurance, critical illness cover and income protection in the UK……
According to FTadviser 42% of UK mortgage borrowers don’t have life assurance to protect their mortgage. *
“Moreover, 71 per cent of people with a mortgage have no protection in place should they become diagnosed with a critical illness, while 81 per cent of Britons with a mortgage have no income protection in place. That’s a total of 1.7 million people in the UK with no safety net” *
According to the study 69% of respondents said the reason for not taking cover was cost.*
The situation is even worse for people in rented accommodation, and families, who have a similar need for protection.
Further research by the onefamily.com suggests that in 2023, there was more than £433billion* of mortgage debt not covered by life insurance in Britain**
Mortgage adviser Luke Spires commented “Borrowers should understand that a mortgage is a formal agreement secured by a charge on the property. Whilst lenders look at cases of hardship, illness and death with some flexibility and compassion, ultimately if a borrower can’t meet their mortgage payments for a length of time, the lender will seek possession of the property”
Luke went on to say “Sadly it is only when illness strikes, or an accident happens that people realise how valuable the financial protection from an income protection or critical illness plan can be”
Borrowers should think long and hard about the “I can’t afford it excuse”. Looking at a typical borrower and their spending patterns it is a question of prioritising what borrowers spend their money on. How much would protection cost is different for each borrowers situation, but costs can be relatively modest. It is important that borrowers understand the cost and ask themselves what is important.
For further information and to discuss your protection requirements you can contact Craig Power craig.power@villagefs.co.uk or Luke.spires@villagefs.co.uk.
*source ftadviser.com and Royal London
** source one family.com
01/02/2025 Information correct at time of issue.
