An increasing number of people are cancelling their personal insurance amid current economic circumstances, according to Feuell4Life director and protection adviser, Sandra Feuell.
Feuell explained that amid the rising cost of living, and with interest rates soaring, more people are "considering cancelling their personal insurance to enable them to pay their utility bills and mortgages".
Feuell warned that cancelling "is the last thing people should do as it immediately leaves them exposed".
She was not alone in this observation as The Orchard Practice chartered financial planner and owner, Joshua Gerstler, said: "We are definitely seeing borrowers having less disposable income available to put towards protection policies."
Similarly to Feuell, Gerstler attributed this to "the result of two events: the increase in mortgage rates and the increase in the cost of living".
House and Holiday Mortgage director and adviser, Joe Stallard, identified another factor in the wave of cancellations, stating: "Unfortunately, it seems to be that this is something people are cutting back on with an attitude of 'it'll never happen to me'."
Gerstler explained: "If they are struggling to pay the policy premiums now, they would struggle even more if they no longer had an income or one of them were to die."
However, Peak Mortgages and Protection director, Rhys Schofield, is not seeing an uptick in cancellations.
Schofield explained that this difference may be because "we recommend our policies based on quality and what they do for people rather than cost so our clients can see the benefit".
He also addressed the current economic circumstances, stating: "If anything, people are more aware of money now so are more open to taking about protection as without it they face dire financial straights quicker."
Schofield added that, as a result, "we're finding particularly strong uptake around income protection".
tom.dunstan@ft.com
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