An increasing number of mortgage holders are ‘financially exposed' as the level of protection cover has dropped over the last year, Scottish Widows has warned.
The life company's Protection Report which surveyed 5,221 UK adults found only 50% owned life insurance compared to 54% in 2013.
Just 17% of mortgage holders have critical illness cover, down from 20% in 2013 and 7% hold income protection, a drop of 3% since last year.
Nearly a fifth (19%) of mortgage holders said they had "no idea" how they would cover their household bills if they or their partner were unable to work due to incapacity, serious illness, an accident or death. A further 48% said their savings would last just a couple of months at the most.
Mortgage holders are also over-estimating the support they would receive from their employer and the state.
The majority (64% of people polled) believed their employer will pay them either a full salary or a full salary followed by a partial salary if they are off work for a long term.
In reality they may be eligible for Statutory Sick Pay (SSP) at £87.55 for up to 28 weeks. Employees may also be entitled to Occupational Sick Pay, a payment made over the level of SSP, dependent on a company's policy and their length of service.
Richard Jones, director, annuities, bancassurance and protection at Scottish Widows said: "Protecting a home is about protecting a way of life that encompasses family, community and often a business. With this in mind, the impact of losing a home could be even greater than we initially realise.
"While affordability cannot be ignored, people with mortgages do need to review and develop a more robust plan to ensure they are protected should the unforeseen happen.
"It's all about making sure you have the right cover at the right time of your life, giving people the peace of mind that their families will be able to keep their home and be financially covered come what may."