The priorities of home movers have been called into question after a new survey revealed that just one in nine people make life insurance protection a top priority.
The survey by a leading bank found that people moving house are far more interested in their home insurance and furniture than in protecting their loved ones against financial hardship.
Moving home is the perfect time to review your life insurance needs. Keep reading to find out more.
Just one third of people concerned with having life insurance in place
A new survey from TSB has found that just 11 per cent of people make life protection a major priority when buying a new home.
The poll found that home movers are most concerned about home insurance, with four in five (81 per cent) of people ranking this as one of their top three priorities. Furnishing the house was an issue for 78 per cent of movers while redecorating was a priority for three quarters (75 per cent) of those questioned.
Just one third of people moving home were concerned about having life insurance protection in place, although this was more of a priority than having additional TV channels installed.
According to the research, just over half (53 per cent) of respondents worried about what would happen to their loved ones if they were diagnosed with a critical illness. Despite this, only two fifths (39 per cent) said that they have protection in place.
Of the 61 per cent who did not currently have any life insurance cover, a third (32 per cent) believed that taking out insurance was too expensive while 31 per cent believed that they did not need life protection. More worryingly, one in seven people (15 per cent) did not think that life insurance was important at all.
Home movers aged between 35 and 44 were the most likely to have life cover in place. 47 per cent of this age group had some cover.
Ian Ramsden, TSB’s Mortgage and Protection Director, says: “We think it is vital that people have the right cover in place to provide comfort and reassurance for their family in difficult times. We want to make sure everyone thinks about their protection needs when they are buying a new home.
“The research shows consumers are not aware of the impacts of being protected. Although it is promising to see people think having protection in place is twice as important as having extra TV channels, it’s worrying to think it is only half as important to them as furnishing their new home.”
Two simple types of mortgage cover to consider
1. Level term assurance
This type of cover provides a fixed sum on your death during the policy term. In the past it has often been used for ‘interest only’ mortgages but it can also be used with a repayment mortgage or as a stand-alone policy to protect your family.
2. Decreasing term assurance
Sometimes called ‘mortgage life insurance’, this type of cover is often used to protect a repayment mortgage. It is designed to reduce in line with your capital and interest mortgage and to provide a sum that is sufficient to clear your outstanding mortgage balance on the event of your death.
Gwilym Pugh from life insurance experts im-insured.co.uk says: “Moving home is an excellent time to review your life insurance arrangements. While ensuring your mortgage is repaid may be your priority, it’s also a good idea to think about what would happen to your family or dependents if you die. Taking out some additional cover may also be advisable.”