Life Insurance Search

Financial services expert Sesame has announced that during July it will be hosting 21 technical seminars throughout the UK. The seminars will focus on issues relevant to the UK protection market, including those that pertain to the decreasing term life insurance industry.

It is anticipated that the seminars will seek to educate advisers on ways to raise revenue through the sale of decreasing term life insurance policies, as well as to provide information on the impact of developments in regulation of the life insurance market.

Sesame’s Learning Manager, Graham Allison, commented, “Sesame is seeking to help advisers increase their focus on both individual and business protection, which is particularly timely as many advisers look to enhance their service and revenue, in light of the current tough conditions in the mortgage market.

“The advice profession is ideally placed to help clients ensure that they have the right level of cover, at an affordable price, with policies that will pay out in the event of a claim.”

He added that many advisers are failing to realize the need many consumers have for decreasing term life insurance protection, saying, “It is a real anomaly that at a time when the cost of protection cover has generally fallen, so has the amount of business being written. Yet statistics demonstrate that many UK households still do not have sufficient life cover for their mortgage, and have no idea of the financial hardship posed by a serious illness or long-term disability."

Sesame's website provides a variety of financial information and advice for both business and individual consumers.

A prominent independent financial advisor has courted controversy by stating that mortgage brokers who fail to sell decreasing term life insurance policies with mortgages “deserve to be shot”.

The senior IFA made her controversial remarks regarding mortgages and the decreasing term life insurance market in June, saying, "Being able to sell protection makes a huge difference, especially when your income has dropped by 50 per cent.

“Frankly, advisors who leave clients without protection in the current climate deserve to be shot," she said.

Her comments come against the background of global economic uncertainty, a housing market lull and a declining mortgage market.

However, there have been recent speculations that the so-called credit crunch is all “media hype”, with 36% of people surveyed by insurer Zurich saying they don’t believe the credit crunch will affect them.

Spokespeople from both Mortgage Talk and Legal & General commented that their advisors would be doing more to sell decreasing term life insurance protection to their mortgage customers.

CETA Insurance have accused the Financial Services Authority (FSA) of failing to “draw a clear distinction” between “expensive loan and credit card protection” and the kind of decreasing term life insurance, sometimes known as mortgage protection, which protects policyholders against the eventuality of repossession.

The accusation comes at a time when the Office of National Statistics say that unemployment is on the rise and credit crunch is tightening purse strings across the UK, meaning that more and more families’ homes are at risk.

Managing Director of CETA, David Quick, believes that high profile investigations by the FSA have encouraged many consumers to shun decreasing term life insurance in the mistaken belief that cover is neither competitively priced nor effective.

He commented, “We have repeatedly warned that the FSA should draw a clear distinction between competitively priced MPPI and the expensive loan and credit card protection that generated huge profits for banks and retailers."

“Now the housing bubble is bursting and repossession orders soaring, many are likely to lose their homes because they were led to believe they should avoid ‘rip off’ MPPI cover. The FSA’s lack of clarity may have the effect of turning a crisis into a disaster.”

The FSA deny any ambiguity in their approach to drawing a clear line between types of mortgage protection decreasing term life insurance and “expensive loan and credit card protection”, commenting, “We’ve always said that PPI can be a worthwhile product for certain people.

“The changing economic condition does not affect our approach because we are concerned about those customers who would not have been fully covered by the policies they were sold, and therefore would not be effectively covered if they were made redundant.”

With the impact of the credit crunch and the increase in food prices, it is clear that the British public are looking to cut out unnecessary expenses. One worrying development, however, is the decision many homeowners are making to opt out of life insurance. 

It is estimated that in recent months thousands of consumers have decided to go without life cover. One study by My Mortgage Direct puts the number of new homeowners choosing to have life insurance as part of their mortgage plan at only 20%. 

Most experts agree that this can be a very risky strategy, as it has the potential to leave families facing not only tragedy but also an uncertain financial future. 

A spokesperson with My Mortgage Direct commented, “Considering the huge financial commitment of a mortgage and what it represents to borrowers’ lives, trying to save a few pounds by going without life cover is a big mistake.  

“Life insurance is not an expensive commitment. In fact premiums have been revised recently and cover can cost considerably less than borrowers might think.” 

Choosing the right decreasing term plan is undoubtedly a serious business. Fortunately, Protected can help you compare plans now with our simple quick-and-easy form.