Insurance policies hit by reduced incomes

CLOSE to one-in-eight people cancelled insurance policies in the last year due to reduced income, a survey has found.

The research also found that just over two out of three people said their household has experienced a drop in income over the last 12 months.

The findings show that 28% cancelled travel insurance with the same percentage canceling life cover. Also 25% cancelled car insurance, 22% critical illness and 13% house insurance.

According to respondents 78% have car insurance, 63% have health insurance, 56% have house insurance, 43% life assurance and 30% have mortgage protection.

The Friends First research found that for 40% of consumers, mortgage repayments are the biggest financial concern, while 45% fear that they or their partner could be at risk of losing their jobs in the next twelve months.

Chief executive of the Irish Brokers Association Ciaran Phelan said: “Economic conditions would indicate that a substantial number of mortgage holders are likely to have got into financial difficulty in the second half of 2009 with the loss of the principle household income, and are likely to be added to the 25,000 already in three to six months arrears on their mortgage.”

The survey said that despite financial concerns there is significant uncertainty among consumers around what state benefits they are entitled to in the event of long term illness or disability.

One in four surveyed said if they were unable to work, due to illness or disability for a long period, they would be have to rely on government disability allowance which would entitle them to a payment of between €196 and €201.50 per week.

Head of marketing at Friends First Eamonn Twomey said: “The results of this research are quite alarming, it is clear that many families are concerned about loss of income through unemployment or illness and yet despite such concerns, there is very poor awareness among the greater population as to what their state entitlements are in the event of illness and how they can protect themselves financially in the event of one or other income earner having to leave the workforce as a result of illness.”