LONDON, England, June. 12, 2012 — Drewberry Insurance launches a new calculator to help consumers understand the true risk of death during their mortgage term in order to highlight the importance of mortgage life insurance for family protection.
In 2011 there were 888,100 new mortgages and re-mortgages but only 571,000 mortgage related life insurance policies taken out (1). Although not all of these borrowers may have required cover it does suggest there is still a significant protection gap for mortgage life cover.
It is possible that borrowers underestimate the risk of passing away during their mortgage term and therefore decide not to take out protection. This calculator is designed to educate mortgage borrowers on what the risk really is in order to help with making a truly informed decision about financial protection.
Tom Conner, head of protection at Drewberry Insurance, says, “As disposable income falls due to high inflation and low wage growth there is a risk that borrowers may see life insurance as a luxury and decide that the risk of passing away isn’t high enough to warrant taking out cover in this economic environment.
“The trouble is that people often perceive the risk of passing away as being a lot lower than it actually is. If this calculator helps to clear up this misconception then consumers can actually make up their own minds as to whether cover is worthwhile based on the facts, which is vital when family security is at stake.”
How it works – Calculating the risk
After inputting your age, gender and mortgage repayment length the mortgage life insurance calculator returns the likelihood that you would pass away during the mortgage term.
As an example, assuming a 30 year mortgage is taken out and the average age of a first-time buyer is 33 years old (2), an estimated 1 in 10 male and 1 in 15 female first time buyers would die during the mortgage term.
Naturally the calculator does not take into account smokers versus non-smokers and other individual health or lifestyle factors but serves as an average based on Office for National Statistics (ONS) mortality estimates (3).
Notes to editors
Data reference sources:
About Drewberry Insurance
Drewberry Insurance is a trading name of Drewberry Ltd, which operates as a whole of market insurance intermediary in the health and protection insurance markets. Drewberry Insurance offer specialised insurance broking services for a range of individual and group policies.
For further information please contact:
Head Office &
Pensions and Investments
78 Cannon Street