Insurance 'valuable during crunch'

By Marianne Straker, Tue 9 Sep 2008 - Published in Life Insurance

An industry body has claimed that the current economic climate has increased the value of life insurance.

The Association of British Insurers (ABI) said the credit crunch is making people look at ways to cut their expenditure and life or protection insurance are products which they offer consider making savings in.

However, the organisation claimed not taking out insurance could leave them unprotected if they lost their job or their life, which would make the effects of the economic climate on their finances worse.

Jonathan French, spokesperson for the ABI, added: "If an individual or family has any financial liabilities, like mortgages or other kinds of loans … it is very worthwhile looking at taking out some kind of life insurance."

He also claimed people should think "very, very carefully" before reducing their cover, as these products increase in value during difficult financial periods.

Research from Prudential found 35 per cent of Britons rate life insurance as the most valuable type of cover, while one in ten would consider giving it up for personal finance reasons.

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