Poor advice and emotive sales techniques could be causing people to waste hundreds of pounds a year on insurance cover which is unsuitable or unnecessary, according to a consumer group.

Researchers for consumer magazine Which? spoke to 39 advisers at banks, building societies and estate agents, posing as first-time home buyers, to see what advice they were given on insurance products sold alongside mortgages.

But the group found that just one adviser gave acceptable advice, asking enough questions and making the right recommendation, while 23 recommended life insurance that was unnecessary as the buyer already had enough cover.

A number of insurance policies are available to cover mortgage repayments if the holder is unable to work due to illness or an accident, such as income protection insurance, which pays out 65% of someone's income until they return to work or retire.

Other policies include mortgage payment protection insurance, which covers mortgage repayments, although it normally only lasts for 12 months, critical illness cover, which pays out a lump sum if you are diagnosed with one of a list of serious illnesses, and life insurance, which pays out a set amount if you die.

But the policies are complicated and cover can be expensive, with premiums for income protection insurance ranging from £35 a month to £108 a month.
Which? found that only three of the 25 advisers who recommended the researchers should take out critical illness insurance explained what conditions were covered, and out of the 30 advisers who recommended some form of cover, only 11 worked out how much their client could afford to pay for it.
A further 18 advisers suggested a level of income protection that was too low.

The group also found that some companies resorted to shock tactics to push the cover, on which they earn high levels of commission.
From January next year the advice given to people buying mortgage and income protection policies will be regulated by City watchdog the Financial Services Authority.