Mortgage lender's life insurance is often over priced

29 May 2008 / by Rebecca Sargent
Homeowners who choose to take out life insurance with their mortgage provider could be wasting a collective £310million each year, research from the Post Office has revealed.

The study found that 34 per cent of people completing a mortgage application decided to buy life insurance at the same time from the same provider. And, while this can save time and effort, homeowners could be spending an unnecessary £2,000 each.

As the credit crisis tightens its grip, consumers are facing up to the reality that spending must be cutback. By failing to shop around, homeowners who buy life insurance from their mortgage provider are technically throwing money down the drain.

Of those questioned, 54 per cent said they did not compare the market out of convenience. In fact, the study showed that only 16 per cent of those with the same life insurance and mortgage provider believed they were getting the best possible life cover deal.

Head of protection at the Post Office, Duncan Caesar-Gordon, said: "Homeowners' finances are already being stretched on a daily basis, so it's essential that people save money where they can.

"This is why it's vital that homeowners understand it is not a requirement to take out 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 added.

Fairinvestment.co.uk offers a means of comparing the life insurance market to make sure you are getting the best possible value for money in this time of tight credit.

Click on the link to get life insurance quotes and compare hundreds of policies from leading life insurance providers.

© Fair Investment Company Ltd