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General50% of Mortgage Holders in the UK Have No Life Cover

50% of Mortgage Holders in the UK Have No Life Cover

It’s the dream, isn’t it? To grow up, find your ideal job and save enough money to afford your own home. In fact, for both couples and singles, getting accepted for a mortgage is one of the most defining and proudest moments of our life. 

This makes the idea that almost half of mortgage holders in the UK have no life cover such a scary statistic. Without a life insurance payment, that beautiful home you worked so hard to afford will be at risk due to financial loss. 

What Happens to a Mortgage After Death? 

When a person dies, may that be your spouse or family member, any debts that are in the deceased’s name will still need to be paid for. For most people, the largest debt that we hold will be the mortgage for our home. So, in the tragic case of death, what will the lenders require?

Well, in these cases, a mortgage lender will look at each case uniquely. However, if you’re single and the family who inherited your property are unable to pay the monthly mortgage, it’s likely that the property will be sold to recuperate costs. 

In the case of joint mortgages, the second named people will normal inherit the property and any payments left on it. In some cases, the half may be left to another person, who will be responsible for joint payments. 

Whatever the case, there will be an extra financial burden on the person left with your home, which can be unmanageable – especially if you were the family breadwinner. This could leave your loved ones, such as your spouse or children in real financial trouble and potentially homeless. 

Life Insurance Provides a Financial Cushion for Your Family

If you have a mortgage, it is essential that you take out life insurance in order to protect your loved ones if the worst happens. The problem is, with so many different life insurance options on the market, how do you know which one is the right policy for you?

It’s not our place to advise which policy is right for you, however one policy homeowners could consider taking out is a whole of life policy. This type of life insurance doesn’t have a fixed time frame and guarantees the provider will pay out a lump sum to your loved ones when you die. 

This sum will help cover mortgage payments, loss of earnings and any other financial commitments that need looking after if you’re no longer around. 

Life Insurance Isn’t Just for Your Mortgage 

In the UK, the average cost of a funeral is £4,271, which is a large sum of money that many of us don’t have saved away. 

At a time where your family and loved ones need space to grieve their loss, your life insurance lump sum will help to pay funeral costs, cover your mortgage and generally give piece of mind to your family. 

Which is why it is absolutely essential that, if you haven’t got life insurance cover, you start looking for quotes and ensure that both you and your spouse are covered. Then, if the worst does happen, you will know that you did everything to ensure your family would be okay financially.

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