Two in five (39%) UK employees do not have any form of life protection, according to research for Canada Life Group Insurance.
When extended across the entire working population in the UK, this could amount to as many as 12.1million people, the insurer said.
Those surveyed with two employed earners in the household reported an average combined take home pay of £3,154 a month.
However, the survey suggested this figure would typically fall to £1,703 (a decrease of 46%) if one of them died - or considerably more if it was the main "breadwinner".
ONS life tables suggest that 1 in 8 men and 1 in 12 women in the UK die during their working life (between the ages of 22-65).
Almost two-fifths (38%) of employees without life protection admitted that they had not given much thought to putting this cover in place.
Yet 34% said they didn't know how immediate costs (such as funeral expenses) would be met if anything was to happen to them and 37% said they didn't know how their survivors would meet long term financial demands, including housing costs.
Four in five (80%) of those without protection also stated that they do not have a will, which leaves employees' families even more vulnerable and their inheritance plans unclear.
Cost was the second most common reason given by employees (27%) for not considering life insurance.
Over half (59%) of all employees surveyed without cover in place said that being offered life assurance by their employer would make them feel more valued. 21% of them actually said they would feel "very valued".
The provision of life insurance by employers, perhaps as part of their auto-enrolment pension plans, could prove to be a strong staff attraction tool - 51% of employees said it would improve their perception of their employer.
Paul Avis, Marketing Director, Canada Life Group Insurance said "Many employees are currently burying their heads in the sand and choosing to ignore unpleasant issues, as demonstrated by the large numbers that do not have a will in place and have not considered how their death would affect their families financially.
"One of the most common reasons for not having life insurance is it is too expensive - but employers can offer this to their staff for less than 1% of salary. Our survey shows staff would feel more valued, and therefore probably more likely to stay within their current organisation, if their employer provided a group life assurance policy."