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Life insurance thought of as compulsory with mortgage

Thu, 01 Mar 2007

According to a recent survey by the Financial Services Authority, half of all consumers think that buying life insurance is compulsory when you take out a mortgage .

The study reviewed the perceptions of almost 2,000 adults, with over 50 per cent under the impression that life insurance is compulsory. The survey also raised a number of other important findings about the view of life insurance in the UK. For instance, whilst 68 per cent of people would shop around for a new gadget, only 55 per cent of consumers get life insurance quotes from more than one company .

Furthermore, the study illustrates how uncertain the British consumer is about life assurance . For instance, 49 per cent were found to be unsure about what they were covered for, 52 per cent revealed that comparing one product against another is too complicated, and 46 per cent said that they do not know what a good deal is.

The head of protectin strategy at Lifesearch, Kevin Carr, reportedly said: "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."
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