Nearly three million households with mortgages do not have life insurance despite many lenders recommending it to borrowers, research has revealed.
Compare the Market, which conducted the survey into life protection, said this lack of cover was particularly concerning because of the growing levels of mortgage debt.
While life insurance is not compulsory, mortgage providers often recommend the product because it provides cover for the value of the loan in the event of the policyholder’s death.
By not having life insurance, if the worst were to happen to one of the borrowers, their family could be saddled with debt which they could not pay back.
Yet Compare the Market’s figures found there were 8.1 million households with life insurance – which meant, with 11.1 million mortgaged properties in the UK, 2.97 million households were unprotected.
Paying over the odds
It also discovered that of the third of UK adults who had a life insurance policy, 79% had never switched suggesting that they were paying over the odds for the cover. The average premium paid, according to the research, was £22.45 per month.
Meanwhile, a quarter of people had bought their policy through a bank or building society which, Compare the Market said, could mean they were on a less competitive deal too.
Dan Hutson, head of life insurance at the price comparison website, said: “Life insurance should be considered essential for those with a mortgage.”
He added: “For those with life insurance, there are a number of ways in which you can make sure you’ve got the right cover. First and foremost, shopping around ensures that you are on the best deal possible.
“It’s also worth making sure you regularly review your policy – for example, although life insurance tends to get more expensive as you get older, making positive life changes such as quitting smoke or losing weigh could potentially bring your premium down.”
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