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Big fall in 20-somethings home insurance

Tuesday, August 05 10:46:16

Just 4pc of all Mortgage Protection policies sold by Caledonian Life in 2013 were taken out by people in their 20s compared to nine years ago when it stood at 18pc.

That's a decrease of more than 75pc, according to Joe Charles of Caledonian Life.

"In 2004, the majority of policies were taken out by people in their 20ies and 30ies, but that's changed considerably with those over 40 now accounting for 55pc of all new policies," he said.

The decrease in younger people purchasing these policies is quite simply and indeed obviously, down to them not taking out mortgages, he said.

"This is for all the reasons we know about and hear about in the media and in our daily conversations. For example, difficulty in accessing credit, Banks looking for higher loan to values (LTV's) lack of houses available versus demand in urban areas, amongst others. Younger men have also been particularly hit by unemployment and emigration, so this is also likely to have had a major impact on the Mortgage market and in turn the demand for Mortgage Protection amongst this age group."

Caledonian Life say the reason that the increase in Mortgage Protection sales for people aged 40-49, is probably due to the fact that more people of this age than in the past, are only getting on the property ladder for the first time now.

"In the 50-59 year category there is also a substantial increase, moving from 9pc of the total to 17pc. One could speculate that this is due to them snapping up some of the property available at reduced prices from the peak years of 2004-2007. Or indeed those who took early retirement packages, are using some of their lump sum to buy an investment property, as high rents are providing good income streams and so on," added Mr Charles.

For more visit: www.businessworld.ie