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Charlie Weston: Think twice and don't let cold callers frighten you

BE wary, be very wary. If, like me, you have been getting cold calls from banks and life companies suggesting that a representative should sit down and do a review of your finances, then you need to think twice.

I got one last week from a company I have never had any dealings with. As soon I told them what I do for a day job, the phone call ended.

Now, why is it that the man from the life company who rang my home did not want to go ahead and arrange the appointment once he learned that I wrote about personal finance?

Could it be that we are in the middle of a massive over-selling -- even mis-selling -- scandal of life-insurance-type products?

Sales of mortgages, pensions and investments products have collapsed. As a result, the emphasis has now switched to pushing products such as life insurance, serious-illness cover and income protection.

Of course, in a recession, sales of these types of protection policies traditionally rocket as consumers become much more risk-adverse.

But be careful. If you do agree to a request from your bank, life company or broker to sit down and discuss your finances, make sure you do not end up being sold something you do not really need. Because those who sell protection policies are adept at playing on your fears and they sometimes use scare tactics to get you to sign up for additional and unnecessary cover.

The basic policies you need, according to respected broker John Geraghty of LABrokers.ie, are motor, home and life cover.

If you have a mortgage, you will have been required by the lender to take out mortgage-protection insurance, so that ticks the life-cover box.

And make sure you are getting good value on the cover you already have. Premium rates have come down due to stronger competition and the fact that we are living longer and are, therefore, less likely to die and trigger a payout, according to the Irish Brokers Association.

Also worth noting is that during the boom many people were sold inappropriate life products. Check that the cover you have is what you need and that you are not paying too much.

Sit down with an independent broker, particularly one who will operate on a fee-only basis, and review your cover, rather than meeting the bank or life company.

For a good explanation of the various types of life cover, check out the 'Planning for the unexpected' section of the regulator's website at www.itsyour money.ie.

Irish Independent