Choose carefully insurance policies to cancel

Fri, 11 Apr 2008

One of the foremost debt management companies in the UK has advised those consumers deep in debt to be careful which insurance policies they cancel. Individuals and families that are struggling to meet repayments, EuroDebt say, need to take care when cancelling insurance policies .

Kevin Still, the director of EuroDebt, reportedly commented: "The problem is that as soon as people start falling behind on their payments they look for the easiest way out. And unfortunately that can mean cutting payments that don’t feel like they are priorities – such as household contents insurance, life insurance, medical insurance and even critical illness and payment protection policies.

Still reportedly continued: "Even worse, we have seen in February the highest level for unsecured loans in five years to £2.5bn, at a time of falling mortgage lending, falling home equity withdrawal and weak credit-card lending this suggests many struggling consumers are trying to borrow their way out of financial difficulty that may not be sustainable in the medium term."

Still reportedly concluded: "Indeed, it is just this sort situation where those dropped insurance policies could be vital if things get worse in the future. This is especially true when individuals start getting into arrears and they come under the spotlight of unsecured lenders . Whilst some of the recent changes in the Banking Code regarding treating customers fairly (TCF) are welcomed, many consumers who haven’t ever been chased for payments can be very naïve when put in a situation where creditors start pushing hard for contractual payments when they fall behind. And this can even be to the detriment of keeping up mortgage, rent, council tax and other priority payments."
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