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Homeowners go without life cover

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More than one-in-three homeowners do not have any life insurance policies, an insurance firm has found.

AA research found only 63% of homeowners had a life insurance policy, with the remaining 37% going without.

However, even those with policies could be going unprotected, with many failing to update their life cover when they move home.

Only a fifth of people update their policy when moving home, The AA said. Policy holders could be left without full cover if the value of their home is larger or their mortgage loan size has increased.

Of those who did change their policy, most said it was because they had moved to a bigger property. Some 21% of policyholders increased their cover by £50,000-£100,000, 18% increased their cover by £30,000-£40,000. However, 7% of respondents said they decreased their cover.

The most common reasons homeowners had for not updating a policy were that they didn’t think they needed to (42%) and that they had not yet had the time (33%).

Kathryn Thomas, director of AA Life Insurance, said: “Checking a life insurance policy probably isn’t front of mind for those people that are in the busy process of moving home.

“If you have a policy to cover your mortgage it’s important not to completely forget about it. Your previous and new home may be quite different in value and there could be a considerable gap between the amount you’re covered for and the amount you would need, meaning there could be quite a shortfall if the life insurance doesn’t cover the remainder of the mortgage.”

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