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Households prioritise possessions over protection

Fewer than 4 in 10 people view life insurance as essential, according to a report by Scottish Widows.

The research, which investigated people's financial priorities, showed that more people think broadband (80%) and mobile phone (71%) services are more important than life insurance (39%). Similarly, critical illness cover (28%) and income protection insurance (18%) were not viewed as a necessity by the majority of respondents.

The study reveals that the majority of people do not have adequate protection in place. Of the 5,144 people surveyed:

  • 33% have a life insurance policy
  • 8% have critical illness cover
  • 4% have income protection insurance.

More than a third (35%) of respondents said they have non-mortgage debt each month and almost a quarter said they didn't know how long they could afford their mortgage if they lost vital household income.

Esther Dijkstra, head of protection at Scottish Widows, said:

"The Mortgage Market Review has changed the way lenders look at our lifestyle and expenditure. This greater scrutiny, along with more people taking mortgages and potentially longer repayment terms means that we should be reassessing our financial priorities. Yet more people pay attention to making sure their possessions are insured than their own lives.

"Although short-term priorities tend to dominate when it comes to the way we assess our needs and spending, it is more important now than ever to have an appropriate plan in place at the right time to protect our homes and families."

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