Protection Insurance Information
‘The Protection Gap’ is being talked about more and more within the industry press. This accounts for those families and individuals who have failed to take out some form of protection insurance. The actual value in monetary terms is not truly known as industry estimates are varied. The general indifference shown by the public towards life assurance is definitely one of the reasons behind this.
Most people see the sense in having some form of insurance when purchasing their first property but even then many complain they cannot really afford it. For a young couple looking to take out mortgage protection then this argument doesn’t really carry much weight. This would be the most cost efficient option for them because the amount paid out in the event of death is designed to pay off the amount of the loan by decreasing over the length of the mortgage. Looking at an example, if a couple who were both in their mid twenties and did not smoke wanted to take out mortgage protection which will cover them for 30 years and pay out £125,000 in the event of a claim, it would cost them just £8.90 per month. So for just over £2 per week they have the safeguard that should either of them die within the next thirty years the mortgage is paid off. Surely this is worth having as it helps alleviate the major financial difficulty should the worst case scenario occur.
A lot of people have it in their head that this will be something that will not happen to them so it is difficult to persuade people that it is genuinely beneficial. It is not entirely uncommon for people to suffer an early death whether that is in their 20’s or their 40’s so the thinking that it wont happen can be slightly naive. Premature death is not the only that people can get cover from and there is a wide range of other choices available that can offer protection.
Clients should really consider all their protection options like critical illness cover, protection insurance and family income benefit when they take out their first mortgage. Your best option is to work out how much you can afford to pay each month and then prioritise your needs for the best cover. By doing this it makes sure that there will be some form of protection in place in the event of something happening.
Tags: protection insurance