Thousands Axe Mortgage Protection Plans Despite Job Fears
Even though there has been a worrying increase in unemployment recently, people are still cutting back on financial protection plans, and it is all because of the credit crunch.
As it stands, 1.72million people are currently unemployed. Which tops unemployment figures for the best part of a decade. In spite of this, it has been revealed by a survey carried out by a financial institution, that 30% of people are cancelling the policies that they had, to protect their mortgage repayments, should they lose their jobs.
The obvious reason for this, is that people simply cannot meet the increasing cost of living.
Due to the credit crunch, people have been extremely conscious of their budgets, and some are perhaps making cutbacks in the wrong areas, as there is an emphasis on the importance of being covered in the event of being out of work. Consumers need to realise that with such economic uncertainty, it is protection insurance that can be the one thing that keeps families going.
It is quite a shocking statistic that less than 50% of people have any sort of coverage for life insurance, critical illness and income protection cover.
This, coupled with the fact that only one in seven British people feel that they could cope, if faced with long term unemployment, means that a lot of people have an inadequate level of cover
A really common type of payment protection insurance, is for accident sickness and unemployment. (ASU) Some refer to it as mortgage payment protection insurance. (MPPI)
Such cover is sold to people when they receive a mortgage, by the financial institution, even though better deals are obtainable through independent providers. An example of how little a policy can be obtained from an independent provider, is that britishinsurance.com will charge a customer just �26 PCM, for a �800 PCM mortgage. Such a package will cover the mortgage payments for 12 months when a policy holder is out of work for such a period.
Such policies only provide protection if the policy holder is made unemployed through no fault of their own.
If a person requires a higher level of cover, then there are income protection policies available, and they are sometimes worth taking into consideration.
Such policies do not cover people that lose jobs, but rather, cover people who become too ill to work, for a period up until that individual becomes 65.
If someone is savvy, then they should think of purchasing income protection before they think of purchasing anything else. It is one thing providing protection against your death, but there is every likelihood that you could be unable to work for a long period, prior to actually passing away.
If it is considered that there are companies out there that offer deals for just �12.50 a month, that would pay out �1,000 a month, up until the age of 65, then such packages are really worth considering.
The cost of a premiums dependable on the age and occupation of a person that wants to purchase such a policy.