Insurance - Homeowners begin to opt out for life insurance as the credit crunch hits

According to broker, My Mortgage Direct, borrowers are trying to hold onto their cash by abandoning their life insurance cover. Concerns arise as only 20% of new borrowers are taking out a life insurance policy to protect their mortgage while others sacrifice the insurance cover as a means to save more. As the credit crunch continues, people will need to reduce their outgoings cutting back on luxuries and non-essential goods. Research conducted by Prudential reveals that one in ten people would give up their life insurance policy due to personal budgets. My Mortgage Direct believes that life insurance cover is regarded as non-essentials by borrowers as it acts as an easy target.

Cath Hearnden of Mortgage Direct highlights the importance of life insurance and warns that passing up life insurance cover is a false economy. She said, “Considering the huge financial commitment of a mortgage and what it represents to borrowers lives, trying to save a few pounds by going without life cover is a big mistake.” Although it may be difficult to make ends meet in the current financial status, Hearnden added that it will be significantly harder for one to manage mortgage repayments should their partner die. She assured that premiums have in fact been revised and life insurance is not an expensive commitment. My Mortgage Direct encourages people to take out life insurance instead of opting out and insists that cover can now cost less than what borrowers may think.

news source : http://www.onlyfinance.com/