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Positioning insurance as a necessity will help close the protection gap – Reassured

by: Phil Jeynes, director of corporate strategy at Reassured
  • 20/09/2021
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Positioning insurance as a necessity will help close the protection gap – Reassured
For the last year, the property industry has enjoyed a welcome boost as a result of the stamp duty holiday.


Prospective buyers seized upon the government’s tax break, which allowed savings of up to £15,000 on a £500,000 house purchase. As a result, the industry enjoyed an energetic 12 months, culminating in a flurry of activity in June of this year as it began to taper off. 

While many experienced financial hardship through the pandemic due to redundancy or a reduction in working hours, others also increased their savings.  

The combined effect of a tax break and access to a bigger pot cash meant prospective house buyers had more money to spend and got a lot more for it. 

Although I can’t say I am front and centre of the industry, it’s clear to see the effect of both of these factors led to an increase in transaction numbers and prices, with a particular focus on high-demand rural areas and market towns.  


Lack of protection 

It has been a welcome measure, helping so many onto the property ladder. But, with such an urgency among buyers to complete purchases before the June deadline, there is a justifiable concern that these new homeowners are left completely unprotected with little or no life insurance in place when it comes to covering their new, hefty financial commitment.  

First-time buyers especially need to consider the significance of what is very likely to be their greatest financial burden yet.  

With this in mind, a precautionary review of life insurance should go hand in hand with house purchases so as not to leave loved ones exposed should the worst happen.  

Life insurance is a key safety net for increased mortgage borrowing, and yet, according to, almost half (42 per cent) of people with a mortgage have no life insurance in place.  

The role of the mortgage broker in this case, should be to make certain that their clients, and their client’s families, aren’t left exposed by a failure to invest in adequate protection.  

Explaining in no uncertain terms the potential dangers of taking out a mortgage without securing an adequate safety net, should be an essential duty as part of the mortgage selection process. 


Connecting with clients and peers 

Using real life case studies or examples tailored to the client’s unique circumstances are tried and tested methods of illustrating the impact of their passing away on their families.  

Its intention is not to scare potential buyers away from committing to a mortgage but educating them on the right way to achieve financial security.  

For mortgage brokers without a specialised knowledge of the life insurance sector, partnering with a reputable insurance broker is a sound way for them to ensure they can provide the customer with as much support as possible.  

Working with an independent insurance broker, as opposed to a sole provider, presents itself as the most logical option for the mortgage broker facing this decision for the simple fact it gives the customer a much broader range of products and therefore a greater likelihood of finding the right protection to meet their specific needs. 

In time, it is hoped the protection gap – the deficit between mortgage exposure and life insurance protection – will even out as more homeowners consider what may unfortunately happen in a worst-case scenario.  

The role of the mortgage broker, in offering their services as an educational asset and reminding prospective homeowners that taking out an adequate life insurance policy is a necessity rather than a preference, will help address the current imbalance. 


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