The Inside Edge
It’s an astounding fact, but almost 7 million mortgages in Britain are not protected by life insurance. This equates to an unprotected value of about £245 billion according to research conducted by Sainsbury’s Finance.
4 in 10 British mortgagees without life insurance have an average outstanding mortgage balance of £36,000. The more worrying figure is that almost 40% of 25-34 year olds and almost one third of 35-54 year olds don’t have their mortgage payments protected. If these homeowners were to die, their dependents would be left holding onto the finances. With job cuts and redundancies happening all over the country, it’s never been more important to protect your property.
Helen Williams, head of Sainsbury’s life insurance, says: “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.
“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.”
Life insurance is a necessity to any homeowner and it actually costs less than many think. If the worst were to happen such as redundancy, long-term sickness or death, all mortgage repayments would be taken care of. Some policies start from as little as £5 a month and it’s worth shopping around for the best deal. Before taking out life insurance you should also read the small print to make sure that redundancy and sickness are covered. These periods are often only covered for short periods of time so it’s good to know your options.
When taking out a life insurance policy you should always do so with care. Make sure that you are honest about any pre-existing conditions and that you give accurate details of your medical history and habits. Anything you don’t disclose now or lie about will usually invalidate any claim made by you or your dependents.
Many people choose not to take out life insurance because they think it’s a unnecessary expense or because it ‘won’t happen to them’. If you can afford a small premium each month to protect your home and those in it, it’s probably the best security you can give yourself and your dependents for the future.