Protection warning for borrowers and brokers issued b…
A national brokerage has warned there is a danger of a shortfall in protection cover for borrowers.
Just Mortgages claims there is ‘a business and moral imperative’ for brokers to ensure clients are ‘adequately protected’.
To improve the chances of this, the company says it is encouraging all brokers to be proactive in contacting existing clients to make sure that their protection needs are being achieved.
Mortgage and protection brokers will normally advise clients on life insurance, critical illness cover, income protection, accident, sickness and unemployment cover and buildings and contents insurance. The firm argues that, over the past year, each of these categories have taken on greater significance.
Homeowners have, since Covid began, been affected by fast-rising interest rates and a cost-of-living crisis made up of increasing energy, fuel and food costs. In addition, this has been exacerbated by a changing labour market and the threat of redundancies as companies come to terms with a split in the workforce of those office based and those working from home or remotely.
Just Mortgages says that all of the above brings massive uncertainty and risk to household budgets and future planning, and claims now is the time for brokers to ensure clients are aware of their protection options.
John Phillips, national operations director at Just Mortgages, commented: “Brokers have a tremendous opportunity to add value to their clients in terms of protecting the financial security of families and the time to do this is right now. Brokers need to have a plan in place to proactively approach borrowers and check protection cover and identify gaps by investing in outreach programmes via social media and local marketing.
“Many borrowers are unaware of the range of protection products that would be suitable for them and brokers can help them decide which types of cover would suit their needs and circumstances, ensuring that these fit within household budgets.
He added: “Brokers should also grasp this opportunity to boost their earning potential as mortgage transaction levels drop and completions are taking longer and longer. Protection is all too often the poor cousin to mortgage advice, but it is increasingly significant and the provision of protection needs to be built into all client relationships.”