According to research undertaken by Mortgage Talk, the North's leading
mortgage broker within the Legal & General network, only just over one third
(36 per cent) of homeowners have protected their mortgages with payment
protection insurance or critical illness cover.
Mortgage Talk's figures show that 21 per cent of mortgage holders currently
have payment protection insurance, while another four per cent have critical
illness cover. A further 11 per cent have both payment protection insurance
and critical illness cover. Worryingly, however, the statistics also
indicate that another 36 per cent of mortgage holders have no payment
protection insurance or critical illness cover whatsoever.
Mortgage Talk Director Andrew Frankish believes that too many homeowners are
still risking the roof over their head by not properly protecting their
mortgages. 'Figures show that over 90 per cent of people have taken out life
cover purely to protect their mortgages. Despite this fact, and even though
the Mortgage Code requires advisers to discuss the need to protect mortgage
payments against unforeseen events such as serious illness, it is
disappointing that so many homeowners are turning down these sensible
additional precautions,' he states.
'Changes to the rules on state support for homeowners facing difficulties
with their mortgage payments were introduced by the Government in 1995.
Coupled with the establishment of the Sustainable Home Ownership Initiative
by the Council of Mortgage Lenders and the Association of British Insurers
in 1997, these rules brought about a target of 55 per cent of homeowners to
take out insurance to protect their mortgages. Our statistics show that
there is still some way to go before this target is met,' adds Frankish.
'With interest rates now lower than ever, home buyers should take time to
consider proper payment protection as an integral part of their mortgage
planning. After all with mortgages cheaper now than they have been for a
generation, homeowners can afford this protection more than ever,' he
concludes.
