Homeowners 'could be wasting money on life cover'

31-Mar-2008

Homeowners may be overpaying by some £310 million every year by taking out life insurance with their mortgage provider that they believe is compulsory, it has been claimed.

Research by the Post Office has revealed more than a third of buyers completing a mortgage application bought life insurance through their mortgage provider, potentially costing them an extra £2,000 each, which may be of note to first-time buyers.

Some 35 per cent of respondents said they felt pressured into buying it or believed it was compulsory to buy life insurance with the same provider for their property.

Duncan Caesar-Gordon, head of protection at the Post Office, said that it is crucial that buyers save money wherever they can as homeowners' finances are being "stretched on a daily basis".

"This is why it's vital that homeowners understand it is not a requirement to take out life insurance with the same company which provides your mortgage. People have the right to shop around across the market and decide for themselves which product offers them the best value and is the most suitable for their life cover needs," he remarked.

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