People who are moving home and are insured should check their policies are still adequate after they settle in their new place, insurer AA recommends.
A larger mortgage could affect an existing policy in a way that it will not properly cover a family if something happened to the policyholder.
New research from AA Life Insurance has found that nearly two-thirds (63 per cent) of 2,000 recent home movers had a life insurance policy but only a third of them (22 per cent overall) updated an existing policy since moving home. Another 14 per cent took out life insurance for the first time.
Many of those polled (42 per cent) thought they did not need to update their policy and this is why they did not do it and a third (33 per cent) said they had still not gotten around to that yet.
Unsurprisingly, those who had updated their policy said it was most likely because they had moved to a bigger property. It was most common for a policyholder to increase their cover by £50,000-£100,000 which a fifth of home movers (21 per cent) did.
A similar proportion of movers (18 per cent) increased their cover by £30,000-£40,000 and only 7 per cent said they decreased their cover.
Commenting on the findings, Kathryn Thomas, director of AA Life Insurance, said:
“Checking a life insurance policy probably isn’t front of mind for those people that are in the busy process of moving home.
“If you have a policy to cover your mortgage it’s important not to completely forget about it. Your previous and new home may be quite different in value and there could be a considerable gap between the amount you’re covered for and the amount you would need, meaning there could be quite a shortfall if the life insurance doesn’t cover the remainder of the mortgage.”
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