Existing and aspiring homeowners have admitted that it would take a drastic change in circumstances for them to consider purchasing a financial protection product, according to new research from MetLife UK.
Mortgage holders confirmed that it would take falling ill (31%), a change in employment status (25%) or an accident (24%) before they would consider purchasing protection to help with their mortgage repayments.
However, MetLife warned, as most policies do not provide backdated coverage, this could prove too late for many.
Lifestyle events such as having children (16%) and getting married (6%) have also triggered the need to review protection, but unexpected changes were more prominent causes.
MetLife found that other examples of a drastic change included reduced pay (18%), loss of a loved one (16%) and COVID-19 (16%).
One in seven (14%) respondents admitted they regretted not taking out a protection policy in the past.
This is likely due to a third (34%) of respondents having to take four weeks or more off work due to accident or illness.
Despite this, a worrying number (22%) of mortgagees say that no circumstance would make them consider purchasing a protection product.
The main reasons for this were not believing it would be needed (28%), cost (25%) and not being able to afford it (22%), as well as not being offered it (12%) and not knowing such protection policies even existed (11%).
A quarter of homeowners (23%) currently intend to purchase life insurance, while 17% will take out mortgage protection cover, 15% critical illness cover and 16% will purchase an income protection product covering accident, illness and unemployment.
For those who have already financially protected themselves, 46% say they wanted the peace or mind, while almost the same number (45%) said they wanted to be prepared should the worst happen, and 35% said it was recommended by their mortgage broker, adviser or bank.
Rich Horner, head of individual protection at MetLife, said: “After such an uncertain year, it’s made the realisation of falling ill or a change in employment a reality for so many.
“We’re all guilty of thinking that ‘it’ll never happen to me’, but really, the worst-case scenario could happen to anyone.
“It’s quite frequently the case that it’s once a person has experienced a change in circumstance that they consider protection, but by that point it could be too late.
“Although protection would cover you in the future, a new policy wouldn’t cover previous experiences.
“And with one in seven regretting not having financial protection in place, it’s vital that current and aspiring homeowners are fully aware of what products are out there. And importantly, the product most suited to their needs.”
MetLife has launched a simplified income protection policy, MortgageSafe, which offers homeowners a monthly benefit that covers mortgage repayments if the policyholder is unable to work for four weeks or more due to accident or illness.