Liquidity crisis fuels interest in protection deals
MORTGAGE STRATEGY - 17TH DECEMBER 2007
The ongoing liquidity crisis has fuelled a surge in mortgage related protection enquiries.
Lifesearch says the sustained slump in consumer confident caused by the crisis has led to more interest in products such as redundancy cover.
The IFA recommends a five-point checklist for borrowers seeking protection deals, starting with a plan to tackle periods of unemployment.
It also says borrowers should be encouraged to consider income protection when buying mortgage payment protection insurance.
A Lifesearch spokesman says: “Typically, mortgage payment protection insurance will only pay out for 12 months, includes a number of exclusion and both the premiums and the conditions of the policies can be changed at short notice.
“But income protection enables borrowers to pay their mortgages as well as covering other living costs.”
The firm also advises borrowers to check whether their employers already provide them with income protection and that protection plan premiums are affordable.
Simon Burgess, managing director of British Insurance, says: “We have seen a 34% increase in mortgage related payment protection insurance enquiries year on year, particularly from borrowers who have come off fixed rate mortgage deals and are trying to cover the increases in their mortgage cost by rebroking their protection deals.”
He adds: “Income protection is the Rolls-Royce of protection, but not everyone can afford a Rolls.”
