Cash-strapped householders hoping to save on ‘protection’

Homeowners in Galway have become so cash-strapped that they are now willing to switch mortgage protection providers to save as little as €5 per month.

A survey from Caledonian Life has found that couples with young children are the most likely to switch providers.

According to the report: “The most up to date figures from the Central Statistics Office have revealed the average disposable income in Galway was just €19,000 in 2010.

“This may be one of the reasons behind recent findings from Caledonian Life which showed that young families would switch Life assurance provider for savings as low as €5 a month if they found a better deal. 

“57% of financial brokers said that their clients would be prepared to change mortgage protection policies for a saving of less than €10 per month,” the report reads.

Tadhg Malone of Caledonian in Galway said: “Our Brokers believe a saving of €5 to €10 per month on mortgage protection cover would be enough to make the majority of their clients change provider.

“Coupled with our own research that suggests that over the last 12 years, premiums have reduced by anything between 21% and 47%, this is an opportune time for homeowners to review their cover to see if they could benefit from changing provider.

“With rates having dropped considerably over the years as we live longer, healthier lives, many policyholders are finding they can make considerable savings by changing from one insurance company to another. 

“As long as they ensure the new policy is in place before the old one is cancelled, the bank can have no objections,” said Mr Malone.

The survey found that 64% of financial brokers believe that couples with young children would be most likely to switch to a better deal if they found one on mortgage protection policies. 66% believe elderly homeowners would be least likely to switch.

It also found that 84% believe payment protection would be the first protection policy (between payment protection, mortgage protection and life cover) to be cancelled by consumers in financial difficulty.

Also, 57% said that in their experience, homeowners default on their mortgage repayments before letting their mortgage protection lapse.