News & Views

Sainsbury’s Shock Report – Is Fear To Blame?

I have been trying to get my ahead around some statistics that I came across yesterday.

Sainsbury’s commissioned the research looking at how many people in the UK had mortgages with no life cover in place to repay the outstanding balance. The results show some surprisingly big numbers, much bigger than most would perhaps guess.

Firstly the total figure of  mortgages without life cover is given at £245,000,000,000 – thats a quarter of a trillion. But  ‘billions’ and ‘trillions’ are everyday newspeak terms now, over used by both politicians and news reporters these words have become a sort of TV litter which we therefore tend to ignore as part of the familiar landscape.

Dig a bit deeper into the Sainsbury report figures though and we start to find more meaningful statistics.

The number of people with no life insurance to cover their mortgages? Just under 7 Million, or to put in a more meaningful way  that equals just over 4 in every 10 mortgages. The report goes on to break down this figure between different age bands, as follows

Age       Percentage of mortgage holders unprotected
18-24    62%
25-34    38%
35-44    33%
45-54    30%
55-64    55%
65+       58%

Of course within these figures there will be mortgage holders who have valid reasons for not having life cover. The biggest such group will be single people with no dependants – fair enough. Another group might those with significant personal wealth.

But what about all the others? What about the significant majority who are not particularly wealthy but who do have dependent partners and/or families? What about the growing number of older people who find themselves with mortgages much later in life than they had originally anticipated? What are the reasons why these mortgage holders choose to have no life cover?

Here are some of the common reasons people give when asked.

”I’ve never really thought about it.” –

”Its a waste of money – its  (my death) will probably never happen ”

”Its too expensive – I can’t afford it”

”No one will insure me with my health conditions”

But for the moment I should mention one other factor which I suspect lurks in the background for many and that is fear. Fear is a great inhibitor in all aspects of life. Fear changes our behaviour, it makes us more cautious, it makes us avoid action, fear makes us hide.

Generally people tend to fear the unknown. I am not a professional psychologist but based on my own observations fear is especially to do with a future outcome that is not known. Often the reason why people don’t face up to their fears is because they are scared as to what the outcome might be if they do. By avoiding action we feel like we are keeping the possible undesired future outcome at bay. Mostly its a subconcious kind of response.

So how does ‘fear’ apply to this issue of life cover for mortgages?

Perhaps underneath these figures many people are frightened about the questions they may be asked if they do apply for life cover. Perhaps they are frightened of having to reveal ’embarassing’ personal medical information about themselves.

Or perhaps they fear the final outcome  – the fear that if they apply they they might get turned down and  all that that might mean. For example it could confirm their own worst fears that they are going to die sooner rather than later, or in some way mark their financial credit record making it more difficult for them to borrow money in the future if they applied for a loan or mortgage. So some people might choose to avoid applying for life cover in order to avoid some sort of final judgement which they fear might finally mark their cards for good.

But of course fearing something does not mean that it is going to happen.

The problem is that many people are needlessly putting their families at risk by continuing to take no action. Put bluntly if you have no life cover for your mortgage on your family home then your home is at risk.  If you have a family you owe it to your family to seek the appropriate life insurance in order to protect the family home for them.

Of course this for many will involve confronting a fear of the unknown.

But if only people with such fears knew where to look they might be quite surprised at the outcome. Here at www.moneysworth.co.uk we offer a specialist service for people with pre existing health conditions who are seeking life cover, for mortgages or for family protection (for other reasons too). Our service is confidential and non judgemental. We have over a number of years developed and refined a process which is designed to help customers find best outcomes. Each case is indivually researched. Further more our service is fee free to our customers and is with no obligation. Therefore it costs nothing to try.

The results are very encouraging. It should be said that we are not able to offer all customers a 100% guarantee that we will be able to find the life cover that they seek but we are able to help the majority, many of whom have been turned down elsewhere before coming to us. Very often the premiums acheived are considerably less than the customer originally feared.

Customers frequently express a high level of satisfaction with our service and often say that a great weight has been lifted for them. With the peace of mind knowing that their dependants are now protected they no longer need to live in fear.