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Take out life insurance for unsecured debt

Date: Wed, 11 Jan 2006

Life insurance could help to cover unsecured debts if the worst should happen, especially as consumer debt levels rise.

New figures from Moneyfacts.co.uk suggest that 47 per cent of their website users have debts of more than £10,000 – often spread over a number of credit cards and loans.

"Almost half of the people completing the polls having unsecured lending of more than £10,000 is a concerning yet not surprising statistic and in line with reportedly high levels of indebtedness in the UK," said Emma Butler, Moneyfacts.co.uk editor.

She added: "With interest rates at their current low level, most consumers are managing to service their high levels of debt; however UK banks are already reporting an increase in bad debt levels and with utility bills set to rise this year, the situation is likely to get worse."

Many consumers should consider taking out life insurance and critical illness cover to ensure that repayments will be met if they fall ill or are involved in an accident – especially if they have dependents.


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