Half of consumers believe it is compulsory to buy life insurance when taking out a mortgage, according to a survey from the Financial Services Authority.
The survey of 1,934 UK adults reveals 51% believe it is compulsory to buy life insurance when taking out a mortgage, compared to 49% who do not think it is vital.
When buying a life insurance policy, the majority (55%) of consumers do not collect different policies from more than one company in order to compare them, compared to 68% who would shop around when buying a new gadget.
The survey also reveals 46% of consumers would check whether their life insurance policy provides adequate cover at least once a year, compared with 22% who would check less often and 30% who would never check.
A further 49% of consumers said they never quite know what they are covered for, 52% said it is too complicated to compare one product against another and 46% said they do not know if they are getting a good deal.
In addition, 52% of people assume insurance companies will make it difficult to get a claim settled.
Kevin Carr, head of protection strategy at Lifesearch, says: “The FSA’s findings support the need for advice. It is potentially arguable that protection on the back of a mortgage sale is insufficient because often life insurance and MPPI are expressed as the only options and the impression is given that they are compulsory.
“I hope the research points the FSA in the right direction in its ICOB review and it forces sellers to provide consumers with more information at the quote stage when they are shopping around.”
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Emily Perryman on 020 7034 2680 or email [email protected].IFAonline
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