Getting a broker to help you with your mortgage search is vital not only for choosing the right product, but also for obtaining protection.
That’s the message from Legal & General Mortgage Club which has uncovered evidence 34% of homeowners who didn’t use an adviser when they took out their mortgage ended up with no protection policy in place.
Its survey found only half of homeowners had taken out life insurance and 5% didn’t even know if they had a policy in place at all.
What’s more, it said figures from Cancer Research claimed in one in two people in the UK would be diagnosed with cancer in their lifetime. Yet, under a fifth of homeowners had not taken out a critical illness policy.
Legal & General said the borrowers who either didn’t have a policy, or didn’t know if they had one, could potentially be missing out on the financial support insurance provided in the future.
‘Deadline to Breadline’
The importance of getting protection in place to cover the mortgage was highlighted by Legal & General’s ‘Deadline to Breadline’ research which showed people could last only 32 days on their savings if they suffered a long-term illness which meant they couldn’t work.
But in the recent survey only 17% of those quizzed said they had income protection.
Kevin Roberts, director of Legal & General Mortgage Club, said: “Good advice doesn’t just help borrowers 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.”
Getting advice
Its research also found, of those homeowners who did get protection, 70% of those had purchased it through a mortgage adviser.
Roberts said advisers were championing cover by having the important conversations that were so vital when it came to this type of insurance.
He added: “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.”
This is such a vitally important part of the mortgage discussion. I think we are starting to see a trend where customers are becoming more used to talking about protection when they arrange their mortgages, and this can only work well for customers and brokers alike.