Legal & General says the rise in unemployment figures highlights the real need for protection.
16 February 2011
Todays unemployment figures will not surprise anybody. With government budget cuts hitting the public sector and businesses that support public departments seeing a drop in orders, job losses are likely to continue.
The planned changes in state benefits means that those unfortunate enough to be made redundant will not find it easy to replace their loss of income with unemployment benefits. More people are likely to struggle to meet their household bills and make their monthly mortgage payments, potentially putting their home and family at jeopardy of repossession.
Recent statistics from The British Population Survey on Unemployment* published in January showed that 35% of jobseekers had a family and that nearly 50% either had a mortgage or were in private rented accommodation.
Our own recent research** has shown that only 2% of those surveyed had considered taking out insurance since the financial crisis hit, to provide cover if they were made redundant. 73% believe that the Government should provide financial help for those that are unemployed but not really understanding the actual benefits this would mean.
One of the real social benefits of insurance is when redundancy happens. For example, Income Protection Insurance allows for an income to continue or more specifically Mortgage Payment Protection Insurance (MPPI) is able to offer homeowners and their families a vital financial safety net providing a monthly amount, typically for up to 12 months which helps to meet their mortgage payments while they find another job. It can also cover them if they have an accident or become sick and are off work. Anyone who has a mortagage or is in the process of arranging one should seriously consider putting mortgage payment protection insurance cover in place to provide for the future, given that the state is unlikely to help."
Notes to editors
The information contained in this press release is intended solely for journalists and should not be relied upon to make any financial decision.
* Source is BPS (British Population Survey) for October to December 2010 of 19,924UK respondents.
** Source: Research commission by Legal & General with B different research of 1005 parents, across the UK, conducted between 4 and 13 January 2011.
Additional background info and comment:
- Estimated figures from DWP (August 2010) put the number of people aged 18-64 claiming employment and Support Allowance at over 2.6 million
- Swiss re term and health watch report (2009) put the income protection gap – the difference between the benefit provided and benefit required, at £190 billion a year.
- 15 million Brits could not survive until the weekend on their savings (source Credit Action- Nov 2010)
- 3 million UK households can no longer afford to save compared to 3 years ago – Legal & General Money mood Survey September 2010.
- Legal & General offers Mortgage Payment Protection Insurance (Accident Sickness and Unemployment cover) to people arranging a new mortgage and / or additional borrowing, i.e. a further advance, remortgage or a new rate deal with their existing/ or a new lender, through an adviser. In addition, Legal & General offers Accident and Sickness and Unemployment cover to new customers who have an existing mortgage where it is arranged through an adviser.
We do not exclude any occupation types, such as people working in the public sector, and have not changed our underwriting rules in light of the recent announcements by the Government. We do not guarantee this will always be the case, as we have to take into account the impact of economic conditions if they persist over a significant period of time, to price fairly for all customers. but we do not expect to change this approach in the near future
It is important that customers are aware that there is a standard exclusion period, applied by the majority of providers, to an unemployment insurance policy. This means that benefits will not be provided if a customer is made unemployed during an initial period after the policy starts. This period varies according to each provider but is likely to be within 60 to 180 days. In addition, if a customer knows, before they purchase cover, that their job is at risk then it’s likely they will be unable to claim. Cover is also not provided if the customer resigns or takes voluntary redundancy.
- As the UK’s number one protection provider Legal & General offers a range of protection and income protection products including level tem and decreasing term life assurance and 5* Defaqto rated Critical Illness cover and Income protection Benefit Plan.
- Our cover is flexible in that it allows customers to customise their own cover to ensure it is affordable and meets their needs. Customers can decrease their monthly benefit, increase or decrease the expiry age and increase or decrease their deferred period.
- · Legal & General also offers Group Income Protection. 2.2 million employees in the UK enjoy the benefits of peace of mind that Legal & General’s Group income and protection services provides, allowing companies to safeguard against the financial impact of illness, injury or death of their employees.
For more information please contact:
PR Manager, Legal & General Group
t: +44 (0) 20 3124 2092
m: +44 (0) 7764 582574
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