Homeowners Lack Loan Protection
It would appear that owning their own home is the number one financial priorities for many individuals living in the UK at the moment.
A recent survey conducted by Ipsos MORI for the Scottish Provident Insurance company amongst homeowners revealed that 89 per cent of us believe it is important to own our own home. It makes us feel as though we have been successful and have achieved something in our lives, as well as giving us a sense of security from owning a house, despite the fact that the majority of people in this situation have taken on the largest debt they are ever likely to have to own it, through a mortgage or a homeowner loan.
Although many of us achieve a sense of security from owning a property, for a large proportion of those of us with a large secured loan on our homes, this could be a false feeling. The survey also asked homeowners about what type of protection they had in place to cover their loan and what would happen to them if they were unable to work through illness or disability for an extended period of time, such as six months or more and also how they would manage to keep up with the repayments on their homeowner loan.
Of those homeowners interviewed, only 54 per cent admitted that they would suffer difficulties with their loan repayments if they were unable to work for an extended period through serious illness and only a worryingly small proportion of borrowers had taken out adequate life and critical illness protection plans to provide cover for their loans, thereby risking the roof above their family’s heads!
The main reason given for this lack of protection was cost, or people saying that they would save the money towards an emergency fund. These people are simply fooling themselves that things would be OK. If you are in this situation, make an appointment to see a financial adviser this week….you need it!
