Mortgage brokers - can we talk about protection?

"This is certainly a conversation that needs to be had. As a society, we have a collective view around insurance that we should avoid it at all costs and cheapest is best - meaning it will be the sacrificed before the likes of Sky TV and the gym membership, which is so, so wrong in terms of priorities. No one will lose their family's home because they didn't go to the gym. Even if they take the decision to cancel the cover they have for a short while, if they don't fall seriously ill or die in the meantime, when they come to reinstate the protection, they will need to take out a new policy. However, they will be older and may have health complications then that they didn't have when they originally took out cover, meaning the replacement is likely to be more costly than the original, making the "savings" of cancelling the payment for a few months a false economy. "If you are seriously struggling, the first thing to do is speak to a professional financial adviser who can review your cover, speak to insurers on your behalf and help you find the best solution to help you, whilst helping to minimise the risk to you and your family of any reductions in cover to reduce your costs."

"Protection is a crucial subject for all brokers to be not only discussing with their clients at the outset but reviewing often. With the cost of living crisis, there is the risk that clients reviewing their monthly commitments will cancel their protection premium to reduce their outgoings. It is our responsibility as advisers, to contact our clients and find out how the cost of living crisis is impacting them. Are they continuing to afford their mortgage and protection premiums? "The industry needs to change from viewing a protection policy as a one-off transaction to a lifelong client who has an annual review to ensure the policy still meets their ever-changing needs, and budget. "This could be the difference between making some tweaks to a protection policy to ensure it remains affordable with the vital protection still in place, and the client cancelling completely, leaving them and their family unprotected. For clients who took out a 90% -95% mortgage last year to get onto the property ladder and borrowed at their maximum capacity within their budget, they will likely be finding the increasing cost of living even more of a squeeze. "It's important to ensure clients view the importance of protection as highly as making that monthly mortgage payment, and we can achieve this through education."

"I have not yet seen people looking to cancel their protection policies as a result of inflationary pressures. In fact, people are realising that perhaps they need more protection against bad surprises, as the cost of living for them and their loved ones has gone up."