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Life insurance a good idea when debts are high

Date: Mon, 06 Feb 2006

Those with debts are being advised to ensure they have adequate life insurance especially as "debt freedom day" approaches.

The average UK earner takes 35 days' of pay to clear the average level of credit card and loan debt they have, according to IFA Promotion. However, those in debt are being advised to make sure they have enough life insurance to cover more than just the average £2,350 interest on their outstanding bills.

The number of credit card and loans has fallen from 62.3 million to 59.4 million over the past year, but many borrowers are failing to protect their loved ones from inheriting their debt. Therefore, life insurance provision could help ensure greater long-term security for many families.

David Elms, chief executive of IFA Promotion commented: "Debt freedom day is of course a hypothetical date, but it serves to demonstrate that the UK consumers really need to take better heed of warnings and take charge of their finances."

He added: "Whilst a reduction in the number of credit card and personal debts is unquestionably great news, the only way to control debt and increase saving power is to adopt careful budgeting."


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