New research by Friends Provident has found that nearly half of people in the UK have no insurance in place to cover loss of income through illness or death of a breadwinner and even those that have considered taking some action would be underinsured by an average of £14,500 per year.

Not being able to pay the bills means you could default on your secured loan repayments and your mortgage repayments. This could eventually lead to the lenders taking your home – all because you were not covered in the case of a loss of earnings.

Alarmingly, a third of people told Friends Provident they could live on less than 35% of their take home pay if they were unable to work through illness or injury. Based on an average weekly income of £489, that means they would have a maximum income of £171 per week – not enough to pay the bills and to be sure you and your family are safe.

Ed Stuart-Brown, head of protection sales at Friends Provident says: “Imagine being told that you had just been given a 66% cut in your income – the impact of that for most people would be catastrophic. It’s time people took control of their future and looked at this in a responsible way, instead of burying their heads in the sand, especially in today’s environment. Ignorance is not bliss, it’s irresponsible.

“It’s a sad fact of life that the unthinkable can and does happen and the last thing you would want is to leave yourself or your family in dire financial straits. And it’s too late to do anything about it once illness, accident or death occurs. If you are fit and well now is the time to act – the cost for most people is a fraction of the potential benefits they could receive and it’s a simple matter to review your needs with your adviser.”

SOURCE: Friends Provident, 02/03/10

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog

Not enough it seems. Since last year, there also hasn’t been a decrease in the proportion of British adults who are concerned about being forced to leave their home during the next 12 months due to falling behind on their mortgage debts, according to St. Mungo’s.

Getting into debt, especially mortgage or rent arrears, is a recognised ‘trigger’ that can lead to homelessness. Around two thirds of St Mungo’s residents in the charity’s own poll said losing their job had contributed either directly or indirectly to their becoming homeless.

People who do not cover their debts with redundancy, critical illness, income protection or life insurance face their home being taken from them if they lose their job – and as we all know, no one’s job is entirely safe in a recession.

Charles Fraser, chief executive of St. Mungo’s says: “Losing your job, and falling behind on home payments, remains the spectre at the feast for many this Christmas and into 2010.”

There is a simple way of avoiding losing your home, whatever happens to your job, and that’s by taking out some cheap, simple insurance products. Talk to your mortgage adviser about keeping your debts safe and ultimately keeping a roof over your head if you lose your job.

SOURCE: St. Mungo’s, 23/11/09

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog.

If you have a secured loan, a mortgage and other financial responsibilities, you need to safeguard your finances and improve your knowledge of life insurance policies such as income protection and critical illness cover.

As the affects of the credit crunch deepen and with recession likely to take hold, protection could prove vital if a person finds they are unable to work due to illness or unexpected redundancy. It could be the difference between surviving the crunch or becoming repossessed.

So talk to your mortgage adviser about taking out some protection. But, you ask, how can you afford protection when you are struggling to keep your head above water in this difficult period? The question you should be asking yourself is how can you not afford it? Most Brits, particularly those with multiple secured debts, would not be able to survive for more than a few months if they were ill, incapacitated or made redundant.

Think about it – if you were not earning money for a long period could you make ends meet? It might happen, and everything is less sure as we face up to a lean 2009.

A mortgage adviser will be able to help you put a plan together that will make sure you can afford the cover, and your current responsibilities. Many people will face repossession next year – up to 75,000 according to the Council of Mortgage Lenders – so take on some protection and avoid being one of those statistics.

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog.