Nearly one in two mortgage holders in Britain do not have their mortgage contributions covered by life insurance, new research from Sainsbury's Life Insurance indicates. 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.
The supermarket bank fears that 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 are not 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. All homeowners should make sure they have adequate life insurance.
Of those who pay a mortgage that is not 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, given that the research also suggested that one third of 35 to 44 year olds do not have life insurance to protect their mortgage payments, and a third of 45 to 54 year olds are not covered.
Lucy Hunter of Sainsbury's Life says, "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. 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."
Life insurance: News update: 5 November 2010