One and half million UK households may not have enough life cover to repay their mortgage

New research reveals that 1.5 million households may not have enough life cover to pay off their mortgage if either partner were to die.

The survey of 3,000 highlighted the possibility that millions of people may well be leaving something sizeable for their loved ones if they were to die suddenly - a mortgage debt. 

Only a quarter of UK adults say they have sufficient financial protection and savings to clear the mortgage and other debts and to provide an income for their family and dependent relatives, in the event of their death.

Seventeen per cent of people surveyed admitted they were worried about the financial impact of their death on their family but incredibly, if they had an extra £10 a month to spend, the majority (65 per cent) would rather play the National Lottery than buy life insurance

The survey also revealed that cost (34 per cent) and apathy (25 per cent) are the main reasons people give for having insufficient cover, while nine per cent were unsure how to buy more cover.  In addition, 1 in 10 thought that they had left it too late to arrange adequate cover.

In terms of a comment on these statistics, I would say that no one likes to think about their own mortality, which is why life insurance is a difficult product for many of us to consider. 

But it is important to plan ahead and make sure loved ones are financially protected when we are no longer around to look after them. 

It can be difficult working out how much cover you need, but as a basic rule of thumb, you should certainly be thinking about buying enough cover to clear any outstanding debts, including your mortgage, and providing a capital sum for your dependents.

In the current competitive market, you can buy life insurance for as little as £10 a month - which for the vast majority of us will be a better investment than £10 gambled on the lottery. 

And, even for older customers, a new policy doesn't necessarily mean sky-high premiums, prices have come down in recent years and its worth shopping around to see if you can find a competitive quote. 

You should also periodically review your cover to take into account changes in your personal circumstances - if you change jobs, buy a new home, get married or have children for example - these things should trigger a review of your requirements to make sure that you leave your dependents an adequate financial safety net.  

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I hope that you found this article to be useful. Thanks as always for your attention.

Mark

mark@themortgagemonkey.co.uk