Mortgage-holding parents are failing to buy adequate life cover according to research conducted by t...
Mortgage-holding parents are failing to buy adequate life cover according to research conducted by term assurance broker LifeSearch.
Although 85% of mortgage-holding parents are confident they have adequate cover, this is down to accident, sickness or unemployment (ASU) insurance schemes that only pay out if the policyholder is alive. 10% of parents do not have any life cover or ASU to protect their mortgage.
The research also revealed that a total of 30% of mortgage holders with children do not have life assurance to cover the mortgage debt in the event of death.
According to LifeSearch, the worrying trend of inadequate cover was found across the social spectrum. One in five mortgage holders in the social group C2, one in eight people in social group C1 and one in six people in the top social category AB were found to have no cover.
Not only were too few people found to have sufficient cover, but confusion over the terms of life assurance policies, brought about by inadequate advice from lenders, was also found to be a problem for many mortgage holders.
Tom Bailgrie, managing director of LifeSearch, said that borrowers were also failing to shop around for cover. He said: "Many people believe that term life assurance is a simple matter and take it from their mortgage provider. In fact, most people could save between a third and a half on their monthly premiums if they shop around."
