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Protection is vital part of mortgage service

Given the concerns by mortgagors about being able to service their mortgage once their special-rate deal has ended, I would challenge advisers, brokers and mortgagees to prove that treating customers fairly applies to mortgagors who have insufficient protection against loss of job or illness and accident.

Why is this not normally an integral part of the mortgage sale for those with insufficient savings to fall back on during a long-term period without an income?

If affordability of the mortgage is the issue at point of sale, then how is it possibly TCF to broker a deal for people who would then find it difficult, if not impossible, to service the loan in the event of the loss of their job or loss of income following an illness or accident?

We have seen what regulatory and Government attacks on the sellers of pensions as well as tax greed has done for pension provision. Could this now be the case for protection, which should be the initial starting point of any financial planning discussion, not an afterthought.

One unintended consequence of the general attack on payment protection insurance sales is the misunderstanding by many advisers, brokers, regulators and certain media, and therefore the public, of the value of long-term income protection, critical-illness cover, mortgage payment protection insurance and unemployment cover.

Why else do we have a growing protection gap where only 52 per cent of mortgage holders have any form of protection?

Increased understanding is called for through the education of adviser and consumer alike, I believe, because it is the advisers’ job to advise, not simply broker a deal, unless the customer understands this is all the service that is provided.

Increased understanding and take-up of protection can only lead to less heartache for the mortgagor when things go wrong. Incidentally, it will also lead to an additional income stream for advisers who want to act in their clients’ best interests.

Brian Lentz
Former IFA & mortgage broker,
now a freelance consultant

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