In his Mortgage Solutions blog, Connells mortgage services director Ross Bowen argued that protection covers more than just borrowers, helping lenders and brokers too.
Sue Anderson, head of member and external relations at the CML
Protection should be compulsory for mortgage borrowers and allowing them to borrow without it amounts to irresponsible lending, according to Mortgage Solutions reader "Ticktock" last week, who observed that "someone should tell the CML".
Ticktock was commenting on Ross Bowen's thoughtful piece arguing that lenders, as well as borrowers, benefit from mortgage protection, since it ups the chances of the mortgage being paid even if something goes wrong.
Ticktock does have a point. The trouble is so do opponents.
For every person who argues that full protection helps the borrower, there will be someone else who argues that the real beneficiary will be the insurance salesman, given that most people will never need to make a claim.
In fact, this has exercised the CML for many years.
Back in the 1990s, we were at the forefront of promoting a comprehensive set of minimum standards for mortgage payment protection insurance. Thanks to regulatory aversion, this is now very difficult to sell and little trusted by consumers, despite its very positive track record on claims.
The reason we have never argued for compulsion is simply because borrowers' circumstances differ so much.
Some can rely on employer schemes, family members, savings, equity or other assets to offset some of their risks.
Others take a sliding scale view of the risks they are prepared to take depending on whether they are single or have dependants.
It has never been straightforward to identify which borrowers (if any) should be compelled to take cover, with the costs it entails.
Surely then, that is where the value of really good advice comes in.
After all, in a world of compulsion and one-size-fits-all, where would an adviser add value?
