Not having mortgage life insurance is a “risky strategy”

Posted 2008-06-5

An expert has warned that not taking out life insurance with a mortgage is a "risky strategy".

Plan Insure states that that due to the credit crunch fewer people are willing to part with the extra money it costs each month to have a life insurance plan in place.

"It doesnt surprise me that, because of the difficulties people are facing, this problem has become more severe. But it is a risky strategy, for all sorts of reasons," Simon Firmin, life and pensions adviser for the company, says.

He adds that life cover is "vital" as without it people will struggle to cope with potential difficulties.

Mr Firmin continued to say that there is also an increasing number of borrowers opting for basic life cover rather than full protection.

Recent research from My Mortgage Direct found that only one in five borrowers are signing up for life assurance along with their new mortgage deal, with many citing financial difficulties as the reason they have not taken out cover.

In related news, the Times has reported that an increasing number of homeowners are opting to take mortgage holidays as they are having trouble making their repayments.

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