Your views: How many times have you heard “the Government will pay my mortgage” as a broker?

According to Newspage, there’s growing concern amongst brokers battling ill-informed excuses for failed financial planning and consumer reliance on price comparison sites for life & health insurance.

Related topics:  Your Views,  Newspage
Tabitha Lambie | Editor, Protection Reporter
14th May 2024
Newspage Protection excuses
"Sadly, I’m finding that the most common objection nowadays isn’t really an objection at all, it’s ghosting – prospective customers simply stop replying to messages, emails, or calls."
- Scott Taylor-Barr, Principal Adviser at Barnsdale Financial Management

“I don’t need protection because it’s too expensive, I’m fit and healthy, my family will help out, the Government will pay my mortgage, I’d rather spend money on other things, I will still be working, I’m nearly retired and, smoking isn’t bad for you.” Simon Bridgland, Director at Release Freedom, believes these ill-informed excuses stem from a lack of trust and understanding of protection products amongst consumers.

“People refuse to think about their own mortality […] If they had, then more people would have incomes and family covered.”

Simon highlighted that often people have Life Insurance that they’ve arranged themselves, after visiting price comparison sites, which is on the wrong terms. “If consumers don’t understand something, they’re usually driven by price, and that can lead to poor outcomes,” he explained.

“One customer said he wouldn’t purchase any protection because his missus wants Sky TV and that’s more important to her,” recounted Scott Taylor-Barr, Principal Adviser at Barnsdale Financial Management.

Scott said it’s unfortunate that consumers have such a poor relationship with insurance; “they tend to try and twist themselves into knots trying to find reasons why they don’t need it and then when they realise it’s important, they go looking for the very cheapest they can find.”

“Sadly, I’m finding that the most common objection nowadays isn’t really an objection at all, it’s ghosting – prospective customers simply stop replying to messages, emails, or calls.”

Justin Moy, Managing Director at EHF Mortgages, said he often finds mortgage borrowers will only purchase what’s mandatory, such as Home Insurance, rather than factoring in the wider implications of having little or no Life or Critical Illness (CI) cover. “As the mortgage has been such a stretch to afford, and the payment high, rather than ensuring that the risks are minimised, the opposite happens […] Borrowers too often shy away from protection with little or no back-up plan if a problem occurs,” he explained.

“One of the most common reasons I hear from people not taking out CI or Life Insurance is that I don’t need protection because it won’t happen to me.”

“It’s eye-opening to know that basic plans could start from the price of a weekly coffee and snack, yet many still overlook the importance of protection,” said Dariusz Karpowicz, Director at Albion Financial Advice. He believes it’s “crucial to remember that while no one expects the worst, being prepared can make all the difference […] some cover is better than having no cover.”

Michelle Lawson, Director at Lawson Financial, said the most common excuse she’s heard is “I don’t need protection because my family will look after me;” consumers often assume that their parents will pay out, rather than take on personal responsibility.

“Many people think they’re immortal and won’t ever need insurance, and that it’s an unnecessary outlay.”

“Protection should be at the forefront of peoples’ minds and professional advice should be sought rather than visiting comparison sites as there are many factors these sites fail to take into account,” she added.

Elliott Benson, owner of Sett Mortgages, agreed that the most common excuses given to brokers are either “my parents will pay my mortgage for me” or “that kind of thing doesn’t happen in real life,” referring to critical illness and death. He’s also heard “it sounds like PPI” which seems to be another reason people dodge protection conversations.

“I don’t need insurance because I have cover through work.”

Ross Lacey, Director at Fairview Financial Management, said employees often think they’re suitably insured by their employer, “when digging deeper people realise how fragile this form of protection is, as it’s based on them remaining with that same employer indefinitely and is also rarely aligned with the cover they actually need.”

“In an ideal world, we'd all have insurance, but this has to be balanced with the cost of the premiums. We hope that the insurance we pay for is a complete waste of money as we'll never need it, but unfortunately, the real-life statistics tell a different story,” he added.

“Lots of people don’t prioritise protection policies because they think they are a waste of money […] They spend spare cash on takeaways or other non-essentials, some even insure their pets but not their family.”

Aaron Strutt, Product & Communications Director at Trinity Financial, said some consumers would sell their house to cover costs, believing that because they don’t have children, it’s not a priority. “Ultimately, the younger and healthier you are, the cheaper the price,” he emphasised.

“What always blows my mind is people spending a few hundred quid a month on their pets but burying their head in the sand about insuring the very thing that funds everything – themselves,” said Rhys Schofield, Brand Director at Peak Mortgages & Protection.

“Yes, Pet Insurance is an important cost to factor into owning a pet, but so is protecting yourself and your family.”

Emily Martin, Associate Partner at The Mortgage Store Chorley, recalled a conversation she had with a recent First Time Buyer (FTB) who said if anything ‘went wrong’, her mother would be able to help out. A few days later, her mother contacted Emily about remortgaging to reduce her outgoings because she was always skint at the end of the month.

More like this
Latest from Financial Reporter
Latest from Property Reporter
to our newsletter

Join a community of over 30,000 intermediaries and keep up-to-date with industry news and upcoming events via our newsletter.