Just 11% of people think having life insurance is a top priority when buying a new home. But who's going to cover the mortgage should the worst happen?
New findings reveal that just 11% of people think having life insurance is a top priority when buying a new pad - with many deeming furnishing and redecorating as more important.
This is according to TSB which found that the house-buying process prompted jut three in 10 to buy cover - with more men (32%) than women (26%) opting to purchase a policy.
It seems that when it comes to buying a new home, choosing furniture and giving the place a lick of paint come top of the to-do list.
But life insurance gives both you and your loved ones peace of mind that liabilities, such as the mortgage, are going to be met should the worst happen.
Why mortgage life insurance matters
Those who fail to take out cover after buying a property with a partner risk leaving their loved ones unprotected – and saddled with the entire mortgage.
At best, the person left behind may have to struggle on to maintain the payments.
At worst, they may find themselves unable to do so, and at risk of losing their roof over their head.
"There's a lot to think about when buying a home so it's understandable that some things get pushed down the list of priorities," says Matt Lloyd, head of life insurance at Confused.com.
"However, having life insurance in place is important.
"In the event of your death, a payout could be used by your loved ones to cover mortgage repayments and maintain their current standard of living.
"Depending on how much cover you take out, a life insurance payout could be used to pay off the mortgage in its entirety."
Life insurance doesn't need to break the bank
Further research by TSB reveals a third think taking out a policy is too expensive, almost a third think they don't need it, and a seventh do not think it is important at all.
But figures from Confused.com show that mortgage life insurance could cost as little as £5.72 a month for £180,000 of cover.
That's equivalent to just £1.32 a week or 19p a day.
This price is based on a non-smoking 28-year old, in Cardiff, insured for 25 years for £180,000 worth of cover on a decreasing term policy, which means as you pay off more of the mortgage, the amount of cover reduces.
"This is not a lot to ensure your loved ones would be able to cover the mortgage in the event of your death," adds Lloyd.
Top tips when buying life insurance
- As well as buying life protection when buying a new home with a partner, you should also purchase life cover when you start a family – or if you have other dependants.
- Consider insuring not only the breadwinner, but the other partner too.
- Life insurance policies which last for a fixed period of time are known as term insurance or term assurance. Whole-of-life policies last until the holder's death. Term assurance is the cheapest, simplest no-frills form of life cover.
- The younger you are, the cheaper the policy – so don't delay in buying it.
- Make sure you set up your life policy in trust, as this is a free and simple way to ensure the money from your life insurance will go the people you want it to in the event of your death
- Critical illness insurance is often sold alongside life cover and can provide a tax-free cash lump sum if you're diagnosed with one of a list of serious illnesses set out in your policy.
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