According to recent research, more than 34 per cent of consumers who did not seek mortgage advice, do not currently have any financial protection on their loan.
This is concerning, as these people do not have a safety net in the event of long-term sickness, critical illness or death of a loved one, which are situations that could leave them unable to meet their monthly repayments.
As one of the report’s authors commented, good advice is not just about where to find the right mortgage but also about recommending the sort of protection people need to safeguard their future.
The future is unpredictable, and so it is important for people planning future finances to investigate financial protection options to avoid situations where they struggle financially. However, currently, more people take out a life insurance policy, which would help their family if they had a fatal accident, than plan for a situation where they are forced to stop working, due to a chronic illness, for example.
Moreover, research suggests that while more than 50 per cent of people who took out a mortgage without financial advice had taken out a life insurance policy, only 17 per cent of homeowners in the same position had a Critical Illness policy. Even more worryingly, separate research suggests that, on average, employees in the UK could only survive for 32 days on their savings if a long-term sickness meant they could not work.