Mortgage holders under-insured by £31,500 on average - Sunlife

clock

The average life insurance payout in the UK is £51,500 which would only cover 62% of the average outstanding mortgage (£83,000), according to research from Sunlife.

For people taking out new mortgages, the gap is even greater - £51,500 would cover less than a third (31%) of the average new mortgage of £167,000, the research found. 

Almost a third (29%) of people take out life insurance when they take out a mortgage, while nearly a quarter (23%) take out cover after the birth of a child.

Dean Lamble, managing director at SunLife said: "Although the UK average life insurance payout is just £51,500, for our Family Life Insurance term product, the average cover that new customers are taking out is £116,692, which is 40% more than the typical outstanding mortgage.

"Yet that in itself is very revealing - people are treating life insurance like a type of mortgage protection. Of course, if for example the breadwinner in a family was to die, being able to pay off the mortgage would be a big help.

"But, while that would take a significant burden off the family, it wouldn't leave any money to pay the ongoing household bills, provide an income or mean the everyday things could carry on."

SunLife has also revealed that it launched a free, interactive life insurance calculator to help families work out how much money they would need to maintain the lifestyle they have now if the main breadwinner were no longer around to provide for them. 

Further reading: 

Former LV= boss Mark Jones joins Sunlife


 

More on Group Protection

CII warns restricted cover can damage consumer trust

CII warns restricted cover can damage consumer trust

“Consumers want confidence that the insurer will pay out”

Hemma Visavadia
clock 09 August 2022 • 1 min read
Children's mental health referrals peaked during pandemic: Royal London

Children's mental health referrals peaked during pandemic: Royal London

Signposted to RedArc for support

Hemma Visavadia
clock 08 August 2022 • 2 min read
Holloway Friendly offers cost of living pause option

Holloway Friendly offers cost of living pause option

For up to six months

Hemma Visavadia
clock 05 August 2022 • 1 min read

Highlights

FCA gives three-month Consumer Duty extension for advisers

FCA gives three-month Consumer Duty extension for advisers

Deadline of 31 July 2023

Hemma Visavadia
clock 27 July 2022 • 5 min read
Meet the firm turning professional athletes into protection advisers

Meet the firm turning professional athletes into protection advisers

"You're only ever as good as your last game, but your next game could be your last"

Hemma Visavadia
clock 25 July 2022 • 5 min read
The COVER Review July 2022: Protection & Financial Education, IPAW 2022 and Reviewing 2022 So Far

The COVER Review July 2022: Protection & Financial Education, IPAW 2022 and Reviewing 2022 So Far

Now available for members to watch

John Brazier
clock 20 July 2022 • 1 min read