MIp29-30_0210:MI 12 Jan 21/01/2010 17:29 Page 3
Protection
29
Jump the
protection hurdles
Phil Whitehouse, head of The Mortgage Alliance
(TMA), considers why you need to get over the
obstacles to protection
C
hristmas and the festive period in worrying unemployment levels. This means protection was cited as the main reason for not
general may now seem like an age there has arguably never been a more important taking out products, closely followed by a lack of
ago but for many the costs are still time for people to take greater responsibility over understanding.
evident as credit card bills mount up their financial choices and assume greater control In fact it appears that Brits value their
well into the new year. Of course over regular and even irregular outgoings. We household contents more than themselves.
people have different methods have all had to impart some degree of financial According to research from Scottish Provident 71
of dealing with their finances curfew on ourselves over the past year or so but per cent of those surveyed have contents
for this expensive time of year. Some may plan it is important to focus on the areas that we can insurance, while only 44 per cent have life cover
ahead over the course of the year by putting justifiably cut back on rather than some of the and just 15 per cent have critical illness cover.
aside money every month and some, possibly the necessities being overlooked. The study also found that only 11 per cent of
majority, spend the proceeding few months Indeed the UK is still not prioritising the people have private medical insurance, 9 per cent
dealing with the outstanding costs incurred. importance of being fully insured for all types of have income protection and 5 per cent have
Whichever the method it is prudent to have scenario. This is illustrated by statistics from unemployment benefit.
some sort of plan in place to deal with any Swiss Re. It’s recent insurance report reveals that
financial implications that can and will arise. over 40 per cent of consumers believe they do Barriers
Without wishing to harp on too much about a not need life or income protection insurance. In The most common barrier cited in taking out
joyous period that is now a distant memory, its latest study, the reinsurer found that 43 per insurance was cost, with 44 per cent of
Christmas is a time for sitting down and cent of respondents claim not to need life respondents claiming it is too expensive which
planning. Planning what to get loved ones insurance and 40 per cent believe likewise for only goes to echo the Swiss Re data. It is often
present-wise, how and where to spend our time, income protection. said that money talks but if it is not spent wisely
even how to fit our favourite TV programmes It’s also interesting to note the report shows it can easily turn into a false economy especially
into such a hectic schedule. So the question that 65 per cent of people would be very or fairly in the long term if any unfortunate event was to
remains why is it that many people can’t seem to likely to seek independent financial advice to take place.
put half as much time and effort into planning understand their needs better, with 55 per cent of There is some positivity to be had amidst these
for their financial future? people saying they would pay for financial advice statistics, especially for intermediaries. It is a
on savings. A further 87 per cent expressed a good thing that people are arming themselves
Responsibility preference for paying a one-off amount, with with adequate cover for their possessions but
This is increasingly worrying when you take into only 13 per cent prepared to pay an amount despite citing the cost surely this should not
account the current economic climate and based on hours spent. Tellingly the cost of come at the expense of personal cover? This
www.mortgageintroducer.com February 2010 Mortgage Introducer
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