£217bn in mortgages going unprotected
Monday, 13 February 2006 12:00
Millions of Britons are leaving their mortgage exposed by not making sufficient provision for it with their life insurance, new figures show.
This effectively could leave their loved ones left at a massive financial disadvantage should the worst happen, Sainsbury's Bank warns today.
Some 4.2 million UK residents are falling into this trap, the bank reveals, seeing a total of £217 billion worth of mortgage debt not adequately covered.
To head off the possible hardship faced by loved ones, the bank is urging all homeowners to ensure they have adequate life insurance.
"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," said David Pickett, Sainsbury's Bank life insurance manager.
"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."
The life insurance cover gap has built up with the recent surge in the property and mortgage markets. As house prices climb and new properties are bought and mortgages taken out, homeowners frequently forget to update their life insurance policies.
And increasing cover levels does not necessarily mean paying more in premiums.
Sainsbury's research shows that 41 per cent of the people with mortgages and life insurance have not reviewed their life insurance and shopped around for greater savings.
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