What happens if you don’t have insurance?
According to a recent survey, 28% of young adults with a mortgage do not have life cover. So, why is this a problem and what happens if you don’t have insurance? We explain the consequences of not having different forms of protection for you and your loved ones.
No insurance leaves loved ones unprotected
Whether it’s life cover, critical illness or income protection, an insurance policy allows you to be prepared should the worst happen. If you or your partner were to have an accident, fall ill or die unexpectedly, then how would the surviving partner pay the mortgage? Do you have enough savings to cover the cost of household bills, food, fuel and other living costs?
In the UK, it’s estimated that 1.7 million homeowners are at risk of leaving their loved ones unprotected in the event of their death. 51% of adults aged 18-40 said they did not have life cover, citing affordability as the main reason.
When young homeowners were asked why they didn’t have life insurance, 23% said they didn’t think it was a priority. Moreover, 22% hadn’t thought about getting a life policy and a further 22% said they couldn’t afford insurance due to the cost-of-living crisis.
A life insurance payout can alleviate the financial burden at a time when you are grieving the loss of a loved one. It can also enable you to manage household expenses, especially if the main income earner has passed away.
The death of a breadwinner is estimated to cost their surviving family an average of £195,000 over 10 years. However, this only covers essential costs, while the true cost to the bereaved family and surviving partner is likely to be much more. Even if you are not the main income earner, life insurance is still relevant as costly care duties could fall to someone else.
Last year, there was a 5.5% overall decrease in the purchase of individual protection policies. This included term life insurance, whole of life cover, critical illness and income protection. But the cost of leaving loved ones unprotected could be detrimental to you and your family’s financial future.
Get the right level of insurance
Insurance policies vary, so it’s important to find a policy that’s right for your personal situation. Also, if there’s an error in your application, this could result in a policy not paying out in an emergency. Therefore, it’s always worth using the expertise of fully trained insurance advisers to check your policy and level of cover.
A common scenario is when a family discovers they do not have adequate cover, and they need to make a claim. At a time when they need financial support the most, a failed insurance claim could result in someone losing their home. Before you take out life insurance, critical illness, income protection or any form of protection, always get professional advice.
At Bubble Finance Hub, we will help you find suitable cover at an affordable cost. Our bespoke approach to insurance ensures you will have the right policy and level of cover for your needs.
If you need insurance or you would like us to check a policy, please get in touch to book an appointment.
As with all insurance policies, conditions and exclusions will apply.
Your home may be repossessed if you do not keep up repayments on your mortgage
Thank you for reading our blog, What happens if you don’t have insurance?
Bubble Finance Hub
Source:
Beagle Street