Are you leaving yourself financially exposed?
Half (50%) of the UK’s mortgage holders are underinsured, having no life cover in place, according to research from Scottish Widows.
The life insurer said that this means 8.2m people are potentially leaving themselves and their families financially exposed if the worst was to happen.
It also revealed that only a fifth (20%) of the UK’s mortgage holders have a critical illness policy, leaving many more millions at risk of financial hardship or losing their home if they were to become seriously ill.
Unable to manage
A third (33%) of mortgage holders admitted that if they or their partner were unable to work for six months or longer due to ill health or personal injury, they’d be unable to live on a single income.
A significant 43% added that their savings would last for no more than a couple of months, while just under a quarter (23%) could only afford to pay household bills and monthly mortgage payments for a maximum of three months if they or their partner were unable to work.
Another 15% admitted they’re not sure how long they’d be able to cope with their mortgage payments.
Johnny Timpson, protection specialist at Scottish Widows, said: “None of us want to think about the worst, but our findings show that there are an alarming number of mortgage holders who are putting themselves at significant risk by failing to arrange cover for the unexpected.”
Chris Gowland, mortgage director at Halifax, said: “Taking out a mortgage is the biggest financial commitment many of us will ever make, so it’s concerning to see that only half of the UK’s mortgage holders have taken out life assurance, and even fewer have critical illness cover.
“Having a financial plan in place will help protect your home in this type of eventuality and give greater peace of mind when it comes to what may be your greatest financial investment.”