A third of mortgages are sold without life cover
Tue, 31 Aug 2010
One third of new mortgage debt has no associated life cover, according to a new report by independent financial research company Defaqto.

In 2009, the Association of British Insurers (ABI) documented 636,973 new mortgage-related life assurance policies written, however the Council of Mortgage Lenders recorded only 925,000 new mortgage advances. Ben Heffer, author of the report and Defaqto's Insight Analyst for Protection, recognises that in some cases there could be prevailing individual circumstances that dispense with the need for life cover.

However, he commented: "The figures suggest that there are many people taking on debt whose loved ones would have no means of paying it off for them if the worst happened. The protection gap does not just apply to life cover but is also a real problem when you look at income replacement products, with so little income protection being sold."

The report called 'Opportunity Knocks' concludes that, as a result of lower inflation and having less personal debt to service, those in employment now have more disposable income, which presents the industry with a major opportunity to sell more protection products.
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