Phil Whitehouse of the Mortgage Compliance and Insurance Club, writing in an October 2016 article for MortgageSolutions.co.uk, has suggested that mortgage brokers who do not inform customers about protection insurance are not acting in their customers’ best interests.
Whitehouse argues that arranging a mortgage for a client and not discussing what would happen if the borrower lost their job and could not afford mortgage repayments puts the client in a vulnerable condition. Protection insurance will provide the assurance that their home will not be at risk if the borrower falls on hard times.
Some mortgage brokers do refer their clients to insurance brokers for advice. It is better if a mortgage broker is also an insurance broker who can offer both a mortgage and the various types of mortgage protection insurance.
Many people use price comparison websites for quotes on mortgage protection, life insurance, critical illness insurance and income protection insurance, which are all insurance products that can cover mortgage payments in case of financial hardship.
An insurance broker often has access to insurance deals unavailable on price comparison websites, which, as Whitehouse points out, often do not give details of the best deals.
Addressing mortgage brokers, Whitehouse said:
“If you’re ignoring it (protection insurance) as a result of lack of interest, then you may need to question whether you’re really doing right by your client.”
Whitehouse urged all mortgage brokers to make protection insurance a key part of the process of advising clients on their mortgage options.