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Financial Health matters

In this context it is interesting to note that sales of mortgage payment protection insurance have not been as high as the industry or the government would like.

This is in part due to the feel good factor which has been so strong for so many in recent years. Low interest rates, unemployment and inflation plus strong consumer demand and high levels of household equity have undoubtedly had an impact on the sale of MPPI products as people adopt a &#39we&#39ve never had it so good&#39 attitude to non-life protection products that cover the loss of their primary incomes.

But as with all products or services, there is clearly a group of consumers for whom protection against the unknown is an important part of any major purchase and I wonder whether this mindset will now start to migrate across to some of the other consumer segments.

While we all hope and believe we will see a slowdown rather than a recession in the economy, the tightening of the belt by the Bank of England and the detailed press coverage this is receiving should encourage more people to think about &#39what if&#39 scenarios and look to their lender or broker to provide suitable cover. Now that we have hit the £1trillion debt landmark, will MPPI play its role in helping individuals and families protect themselves from the increasing pressures they will face in servicing their financial commitments in an economy where the cost of funding that debt is once again rising?

So this is a good time to refocus on MPPI and the benefits it can deliver. But let&#39s not forget that in an economy where debt is multi-sourced and the size of that debt is rising it is not only MPPI that provides protection.

Never has it been more important to take a holistic view of a consumer&#39s financial commitments because that is when protection can really add value.

And if consumers feel totally protected in their financial dealings, perhaps they won&#39t be quite so concerned about the &#39feel not-so-good&#39 factor the next time they open their newspaper.

Shirley Woolham is financial health business manager at CPP Group

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