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Life insurance a must for those in debt

Date: Tue, 15 Nov 2005

Life insurance is a must for those people in debt and struggling to live within their means.

Research by accountancy firm PricewaterhouseCoopers (PwC) shows that many people who rely on Individual Voluntary Arrangements (IVAs) to escape bankruptcy could leave relatives in debt if the worst should happen as they continue to overspend.

IVAs offer an alterative to bankruptcy and allow people to make small monthly payments to creditors to cover any outstanding debts. However, Pwc discovered that out of 1,257 IVAs, 75 per cent of debtors believe "living beyond their means" caused debts to mount up. Just 20 per cent believed the financial trouble had been caused by unemployment or marriage breakdowns.

"It implies there are two classes of borrowers," said Pat Boyden, head of personal insolvency at PwC.

"Those who consistently pay off their debts; then there is a revolving population of people who don't do that but occasionally fall off the conveyor belt."

It is hoped that those who have trouble managing money should seek advice as well as considering life insurance so that their outstanding debts are not passed on to other family members.


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Endsleigh Insurance Services Limited is authorised and regulated by the Financial Services Authority. This can be checked on the FSA Register by visiting its web site at www.fsa.gov.uk/register.
Endsleigh Insurance Services Limited. Company No: 856706 registered in England at Shurdington Road, Cheltenham Spa, Gloucestershire GL51 4UE.