Do I have sufficient protection?

23rd October 2024 Posted in: Housing Market, Mortgages, News

According to Beagle Street research earlier this year, almost 28% of young adults (between 18 and 40) with a mortgage in the UK do not have life cover. In 2023 there was more than £433 billion of mortgage debt uncovered, which is huge! The main reasons given were:

• It’s not a priority expense
• I’ve never thought about it
• The cost-of-living crisis
• Cover isn’t affordable

Now is the time to think about it, and costs could be less than you think. If things are already stretched, how you would manage financially should the worst happen, if you don’t have sufficient protection inplace?

If you are lucky enough to have savings, they will only last for a limited time. Help from relatives could be less forthcoming, even if they really want to help you, given they are likely to be dealing with the increased cost of living themselves. You insure your cars and your pets, so why not yourself and your family? Your mortgage is probably your largest monthly outgoing, so surely it makes sense for this to be protected as a minimum.

We know it’s not nice to think about and often difficult to talk about, but just ask yourself how you might cope?

• If you or anyone in the household were made redundant, would you be able to pay your mortgage and other bills/outgoings?
• If you or anyone in the household were unable to work due to an accident or sickness, or was diagnosed with a critical illness, would you be able to pay your mortgage and other bills/outgoings?
• If you or your partner were to die prematurely, would the survivor be able to pay the mortgage and bills/outgoings?
• If something happened to your home, or anything in it, could you afford the repairs, replacements or even potential temporary accommodation?
• If you think you could manage to pay in any of these events, how long could you realistically manage for? How much do you have in savings, and could family really help out, even if they wanted to?

It’s unlikely that the answers to all of the above questions would be YES!

Bear in mind that premiums will be cheaper the younger you are. Don’t hold off thinking you’re too young for anything to happen to you as unfortunately this isn’t always the case. The average claimant for income protection with Royal London was 38 in 2022.

Premiums may be less than you think (sometimes as low as a few coffees a month), and many providers offer benefits to their policy holders throughout the term of the policy, from children’s critical illness or fracture cover, access to physiotherapists and mental health specialists, to discounts on cinema tickets and smart watches. It really is worth having a discussion on how we can best help you.

If you have existing cover but think it may no longer be suitable, or are struggling to afford the premiums, please don’t cancel if possible, and leave yourself unprotected. We can review your current needs to see if any changes can be made or if we can find a cheaper policy. Worst case scenario, some cover is always better than none!

Don’t forget that having sufficient Buildings Insurance may be a condition of your mortgage, and your solicitor may ask to see evidence of this before allowing you to complete. You may find cheaper cover on comparison websites, but often, this is because the policy provides less coveror there are exclusions. We will be happy to check quotes you may have obtained against those we find, so you are fully informed before making your decision.

If you would like to discuss Life Cover, Critical Illness Cover, Income Protection, Buildings/Contents or Landlords Insurance, don’t hesitate to get in touch with Ingard. Our advisers will be happy to help.