According to research by Legal & General Mortgage Club research, 34 per cent of consumers who did not use a mortgage adviser currently do not have any kind of financial protection for their mortgage. This includes Life Insurance, Critical Illness Cover (CIC), or Income Protection. The research, which surveyed 2,000 UK homeowners, highlighted that many consumers are stepping onto and up the housing ladder, but failing to put in place a safety net in case long-term sickness, critical illness, or death of a loved one could leave them unable to meet monthly repayments on their mortgage. What’s more, five per cent of respondents who hadn’t used an adviser were unaware about whether they had a policy.
As such, these people could potentially miss out on the financial support of protection which they may unknowingly be able to claim for, Legal & General said.
Kevin Roberts, Director of Legal & General Mortgage Club said: “Good advice doesn’t just help borrowers to find the right mortgage, it’s also vital in recommending homeowners have the protection they really need to keep a roof over their heads should a loved one fall ill or die.
“Last year, intermediaries were behind 70 per cent of the sales in the Income Protection market alone and our research certainly shows that advisers are championing cover by having the important conversations that are so vital when it comes to this type of insurance.
“At Legal & General, through our Mortgage Club and our protection business, we continue to work closely to support these ‘heroes in the middle’.
“We think advisers are absolutely critical when it comes to buying a home, whether it’s for a first-time buyer, a home mover or someone who wants to downsize.
“From helping borrowers to navigate the thousands of products on the mortgage market to making sure they have protection in place to avoid a financial crisis in their time of need, good advice really can and is helping borrowers every step of the way.”
Of those surveyed, 51 per cent said that they had taken out a life insurance policy, while the CIC figures were lower.
While figures from Cancer Research UK claim that one in two people in the UK will be diagnosed with cancer in their lifetime, less than a fifth (17 per cent) of homeowners who had not opted for a mortgage adviser’s advice had a Critical Illness policy.
Another 17 per cent said they had an Income Protection policy.
According to Legal & General’s Deadline to Breadline research, on average, employees on the UK could survive on their savings for 32 days, if a long-term sickness meant that they couldn’t work.
It seems that there is some awareness of the risks among these homeowners.
In fact, more than a third (35 per cent) of respondents who did not seek help from a mortgage adviser said that the most important thing to protect when taking out a large financial commitment was their family’s financial security should they die.
And, the survey also saw 29 per cent of people say their biggest concern was their or their family’s financial security, should they be unable to work.
Legal & General said that 62 per cent of customers who did use a mortgage adviser had been recommended Life Insurance, with a third (33 per cent) advised to get cover against serious illnesses, and 29 per cent Income Protection.