The Intermediary

Thousands at risk of inadequate protection due to outdated personal details

Protection expert Andy Walton is sounding the alarm for the 382,000 individuals who switched jobs at the end of last year, warning that they may be at risk of not having adequate protection due to outdated personal details on their protection policies.

As the protection proposition director Mortgage Advice Bureau, Walton emphasises the importance of updating policies following significant life events to ensure appropriate coverage.

“It’s easy to forget to update policies with life moving at 100mph, but it’s important that people take a few minutes to think about their personal life changes and what that might mean for their policies,” Walton said.

With life moving quickly, it can be easy to overlook updating protection policies. However, Walton cautions that events such as changing jobs, moving house, having a child, receiving pay raises, or taking on new loans or debt can render existing protection arrangements unsuitable.

This could leave families vulnerable and unprotected or with policies that do not work for them correctly.

Protection policies should be a vital consideration when obtaining a mortgage or remortgage, and some lenders may even require them.

The market, however, can be confusing, with options ranging from mortgage payment protection to life insurance and critical illness cover.

Walton stresses the importance of keeping details up-to-date and accurate, as well as consulting with an adviser to ensure the right coverage for each individual’s circumstances.

“For many, a property is their prized possession, and people should think about what could happen if they suddenly weren’t able to pay their mortgage,” Walton explained. “As with all insurance-based products, plan for the worse and hope you never need it, but it’s there as a backstop if you do. As our lives change, so do our priorities, and what might’ve been the best protection for you five years ago might not be now.”

In light of a 2022 study revealing that nearly one in five people would struggle to pay their mortgage for two months without a regular income, Walton urges homeowners to seriously consider additional protection for their mortgages.

As lives and priorities change, so too should protection policies. Walton advises planning for the worst and hoping for the best, emphasising that insurance should be in place as a backstop before trouble arises.

“It’s important to remember – if you only think about insurance when you’re in trouble – then you’re in trouble!” Walton concluded.