Nearly half of people with a mortgage have no life insurance
Four out of ten UK mortgage holders have no life insurance protection for their mortgage, research reveals.
The study by Sainsbury’s Life Insurance shows that one in three 35-44 year olds, the age range most likely to have dependents, do not have cover.
Helen Williams, head of Sainsbury’s Life Insurance, said: ‘Mortgage repayments are one of the biggest financial commitments in many peoples’ lives but, as our research shows, unfortunately it is not something that enough mortgage holders have taken steps to protect.
Does everyone need life insurance? Those without dependents may not
There could be many reasons for this, perhaps some may feel it is less of a priority than other items on their household budget however, being unprotected could have serious implications.’
The company says its study, based on responses from 719 Britons, suggests seven million people could leave behind £245bn of unpaid mortgages, leaving dependents with the financial hardship of meeting monthly repayments or face downsizing to cope.
But does everyone need life insurance?
Those without dependents may be tempted to leave their liabilities uncovered – after all, on their death the house could be sold to cover the mortgage.
But Ray Black, founder of independent life assurance and protection comparison website www.money-minder.com, says: ‘Most homeowners with an outstanding mortgage on their property should make sure they have enough life insurance cover to pay off the debt if they die before the mortgage is repaid. Rarely is it good advice for someone to have a mortgage on their property and no life insurance to cover it.
‘Even in circumstances where there are no children or other dependent relatives, we would still suggest that life insurance is a prudent and cost effective way of protecting your surviving family from the problems which can come from inheriting a mortgaged property.’
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