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Life Insurance -
Life Insurance: How Many Of Us Waste Millions When Pressured? |
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Most people in the UK have always faced the pressure from sales persons to buy things they may not even need. Often you get phone calls telling you of an existing or new product for which your money is sought. You are so pressured until you either say no, firmly, or cave in and be dragged into what you could regret for a long time to come. Even sometimes you could be pressured by your own insurer, as the survey by Post Officer recently showed, into taking out policies you already have. I remember having to take cover for my mobile phone, when there was already a warrantee for it, which I only found out when the phone developed a fault and needed fixing. This was after I had coughed out a lot of money on premium.
According to the Post Office poll Brtions are wasting at least £310 million every year on life insurance cover. This represents about 34 per cent of people completing a mortgage application paying about £2000 each as they take this additional cover from the same provider. The trouble with this is not just that people feel pressured to take out the additional cover, but many of those often believe, without making efforts to shop around, that it’s more convenient or less stressful to collapse to such pressure. At least 54 per cent of respondents to the survey had this belief.
But, of course, there were those who admitted they were confused to be able to differentiate an obligation or requirement from voluntarily signing up. Thus 35 per cent said they feltl either pressured or that it was compulsory to purchase life insurance policy from the same provider. While they may have some excuse, at least, the big question is what was it going to cost them to take time to find out more about it? They only needed to ask why they were asked to take out the additional cover. The trouble with keeping silent in a situation like this is that you could always get ripped off.
However, it may matter little if you are pressured into signing up the best deal there ever was. On the contrary it could be very annoying if you end up discovering it was not worth the money you were made to pay. Many of those who took part in the study said they were aware they were paying more for less, but still felt they couldn’t do otherwise. Only 16 per cent of participants said their mortgage provider offered the best value of life insurance.
I am quite surprised that anyone would want to throw around their money as if they were so easily made. I got even a bigger shocker reading an article in the Observer of Sunday, 30th March, 2008 in which Sam Dunn agued that a growing number of Britons, in spite of a drop in the cost of life insurance cover, still do not feel it’s important to purchase it. Citing a Swiss Re ‘Term & Health’ report, the writer said it was found that the UK’s life insurance industry recorded a fall by 23 per cent in the sales of term insurance to consumers between 2003 and 2007. Similarly, Dunn said, while quoting research by mortgage brokers John Charcol, that about 59 per cent of mortgaged homes had no cover at all, and that out of the 41 per cent that did, at least half had insufficient cover.
If homeowners do not think it is so important to take out life insurance cover why then do many people let themselves forced into purchasing it from their mortgage provider? Perhaps, homeowners do no think it’s not so important, but their main problem is how go about shopping the best deal. Or, if we seriously consider the findings quoted by Sam Dunn, then people do not feel it’s that important but are only roped into the deal.
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