Nearly one in two mortgage holders in Britain (43 per cent) do not have their mortgage contributions covered by life insurance, according to new research from Sainsbury's
Life Insurance.
The findings suggest that there are over 7.1 million people with a collective outstanding mortgage balance of £318 billion who have no
life insurance to cover this, says Sainsbury's Life Insurance.
This represents a 47 per cent increase on the £217 billion of
mortgages not protected by life cover in 2006, when the Sainsbury's Life Insurance last conducted this research.
The supermarket bank fears the recession could have a part to play in this dramatic increase in unprotected
mortgages. It believes that many people may be inclined to put less importance on life insurance, worrying more about the here and now rather than the unthinkable.
Sainsbury's Finance is warning those who aren't protected - for whatever reason - of the serious consequences and impact this could have. If these people were to die, their loved ones may not be able to afford to make the mortgage repayments and ultimately in some cases may not be able to carry on living in their home.
Sainsbury's Finance is urging all homeowners to make sure they have adequate life insurance.
Of those who pay a
mortgage that isn't covered by life protection, the research indicates that, on average, they are personally currently responsible for an outstanding balance of over £44,000.
This is a worrying finding, says Sainsbury's
Life Insurance given that its research also suggested almost one third (32 per cent) of 35 to 44 year olds don't have
life insurance to protect their mortgage payments, and over one third (34 per cent) of 45 to 54 year olds aren't covered.
Young
mortgage holders are less likely to have dependents so having life insurance to cover their mortgage is less important, but worryingly, many of those in age groups who are likely to have dependents are also unprotected, with 32 per cent of those aged between 35-44 and 34 per cent of those aged 45-54 not protecting their payments.
"Life insurance provides financial cover should the unthinkable happen, enabling people to be secure in the knowledge that their dependants could receive a cash lump sum if they were to die,” said Lucy Hunter, Sainsbury's
Life Insurance Manager.
“This is particularly important for homeowners, who should take care not to overlook life insurance as it can help to ensure peace of mind that the property is paid for upon death, allowing loved ones to continue living in the family home, and it could also alleviate any financial burden, therefore providing financial security."
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