Mortgage boom not aiding protection sales
Recent research from Gocompare.com suggests as many as 40% of people do not have sufficient life cover to repay their mortgage if they were to die.
The mortgage market has experienced a resurgence in recent months, with lenders and brokers reporting an improvement business. But although protection sales have been historically linked to mortgage sales, there has been a noticeable absence of a similar increase and advisers are warning that protection should not be overlooked for easy mortgage sales.
The Council of Mortgage Lenders says the total level of mortgage lending in July was up by 26% compared with the previous year, while lending to first-time buyers is now at its highest since 2007.
This increase in mortgage lending has not just been seen over the past couple of months but has been steadily building from the beginning of the year, as lenders have taken advantage of the Government’s Funding for Lending scheme to offer increasingly competitive mortgage deals.
But so far there seems to be little knock-on effect on protection sales.
Many life insurers have completed their financial reporting for the first half of 2013, and the results have not been encouraging for protection sales.
Ageas reported a 7.4% drop in new annual premiums, from £17.1 million in the first six months of 2012 to £15.8 million in the first half of this year. Meanwhile, Royal London, which includes the brands Scottish Provident and Bright Grey, reported a 6% fall in protection business, from £35 million to £33 million. Legal & General reported a 10% drop, from £72 million to £65 million, while LV= experienced a 9% fall, from £16.1 million to £14.7 million.