One in two mortgage holders unprotected by life insurance

One in two mortgage holders unprotected by life insurance

Nearly one in two mortgage holders in Britain (43 per cent) do not have their mortgage contributions covered by life insurance, according to new research.

A report by Sainsbury's Life Insurance suggests 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.

In 2006, meanwhile, this figure was 47 per cent lower.

Sainsbury's Life Insurance has expressed fears that the recession could have a part to play in this dramatic increase in unprotected mortgages .

Lucy Hunter, Sainsbury's Life Insurance manager, explained that life insurance allows people to be secure in the knowledge that their dependants could receive a cash lump sum if they were to die.

She added: "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."

Meanwhile, the Council of Mortgage Lenders confirmed recently that gross mortgage lending totalled an estimated £12 billion in September, a fall of one per cent from £12.1 billion in August. 

http://www.mortgages.co.uk/news/2010/Nov/one-in-two-mortgage-holders-unprotected-by-life-insurance-800210869.html

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Scary, scary statistic, especially the way the housing market is at the moment. 2011 should see the beginning of interest rate rises, combined with VAT and other tax rises, public sector job cuts means money is going to be extremely tight next year for everyone. Not to mention the bank of England printing money like it’s going out of fashion, it’s also bound to see inflation higher than usual at best, out of control at worst, now would not be the best time to not have the mortgage covered with life insurance. Yes the premiums might be unaffordable but is it really worth the risk?