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Sainsbury’s Bank warns that there are up to 4.2 million people that do not have their mortgages covered by life insurance.
This means that if they were to die, their loved ones may not be able to afford to make the mortgage repayments and ultimately in some cases not be able to carry on living in their home.
With a surge in the housing market that saw the number of new mortgage approvals rise to 122,000 in December 2005, the highest since May 2004, this protection gap could become bigger.
David Pickett, life insurance manager at Sainsbury’s Bank said: "Life insurance provides financial cover should the unthinkable happen, enabling people to be secure in the knowledge that their dependants could receive a cash lump sum if they were to die."
"Homeowners in particular should take care not to overlook life insurance as it can help to ensure the property is paid for upon death alleviating any financial burden and may even provide financial security for loved ones."
Life insurance does not have to be expensive. Life insurance premiums, through Sainsbury’s Bank, which start from as little as £5 a month, are among the most competitive available and regularly appear in best-buy tables. Indeed now is a good time to buy cover as Sainsbury’s Bank is offering a 5% discount on life insurance purchased before 26th March, for the life of the policy.
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Size of mortgage |
Estimated number of people with mortgages of this size that do not have them covered by life insurance |
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Up to £50,000 |
878,000 |
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Between £50,001
and £100,000 |
408,000 |
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Between £101,000
and £200,000 |
583,000 |
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More than £200,000 |
206,000 |
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Note: 57% of people with mortgages but no life insurance either refused to disclose how big their mortgage was or did not know. |
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