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L&G predicts mortgage protection sales boom

United Friendly claims it is never too early to start saving for a wedding and investing in its endowment savings plans can produce a sizeable nest egg.

Research carried out by the direct life office has prompted it to encourage parents to start saving for their child&#39s marriage.

The survey shows the average cost of a wedding in the UK is £14,000.

The most expensive items are food and drink, which can amount to £3,000, and the hire of the venue and equipment, which can cost £1,000.

It says savers investing £50 a month into a 10-year United Friendly endowment savings plan with an average growth rate of 8.3 per cent would have seen their policies maturing this June with a value of £9,226, which can go a long way to paying for a wedding.

Marketing director Helen Matthews says: “There is no doubt that weddings are expensive. However, we want couples and parents to realise that they can ease the stress of unforeseen costs by investing their money wisely.”

The trend towards repayment mortgages is creating new opportunities for IFAs to recommend payment protection cover, according to Legal & General.

It suggests borrowers switching from a mortgage endowment plan are likely to review their protection needs as they seek to replace their lost life cover.

It believes payment protection is a logical investment so borrowers can ensure their mortgage gets repaid in the event of sickness or accident.

L&G says the market for this type of product was worth £415m in 1999 and predicts this will double to £825m by 2004.

The insurer is launching a campaign directed at IFAs pointing out reasons for including payment protection when discussing mortgages. According to the Council of Mortgage Lenders, only 19 per cent of mortgages have payment protection attached. The Government wants to reach a target of 55 per cent.

IFAs are required under the mortgage code to explain the financial consequences of long-term illness on mortgages. L&G says they should be looking at clients&#39 ability to continue to meet payments under any circumstances.

Housing and protection head of business development Richard Verdin says: “Mortgage payment protection should be high on the list of topics for discussion with all mortgage customers. These payments can be a large part of a homeowner&#39s monthly outgoings and, if there is no income, mortgage arrears can build up.”


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