Contracting household budgets are causing only 20% of borrowers to sign up for life insurance along with their mortgage, according to My Mortgage Direct (MMD).
The figure marks a continuing downward trend in the number of people taking out life insurance with their mortgage. In 2002, MMD recorded a third of borrowers who took out life insurance with their mortgage and in 2006, this had declined to a quarter.
Despite the financial constraints facing consumers in the current economic climate, opting out of life insurance is not a safe way to save money, according to Cath Hearnden, mortgage broker at MMD.
“Of course it’s hard to make ends meet in the current financial climate,” she says, “but it will be a great deal harder for one person to manage the mortgage repayments on their own should their partner die.
“People don’t think twice about insuring their buildings and contents or even pricey gadgets such as their ipod or Blackberry but will scrimp on insuring the very means of paying their mortgage – their lives.”IFAonline
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