Many people in the UK are underprepared to pay their monthly housing costs if they’re unable to work due to illness or disability.
This is according to findings from Royal London’s latest report, ‘Tackling the gender pension and wealth gap’,
Royal London’s research shows 8 in 10 homeowners paying a monthly mortgage do not have income protection in place, and two thirds have no protection should they be diagnosed with a critical illness, risking their financial stability if they are unable to work because of a longer-term illness.
While the numbers who have safeguarded the family home if they die sooner than expected are more encouraging – two thirds (63%) have life cover – the report says it is worrying that so many do not have a policy to replace their income if they are unable to work through illness or disability.
Statistically men are around six times, and women 12 times more likely to be ill and unable to work than they are to die, making income protection an appropriate option.
Of course, homeowners aren’t the only ones with financial commitments who need to keep a roof over their head. Tenants also need to pay their rent and can be just as exposed without insurance in place, yet the statistics make for even more concerning reading. Less than a third (29%) of renters have life cover, and only 6% have income protection.
Royal London protection expert Jennifer Gilchrist comments: ““While it’s encouraging that life insurance is in place for many homeowners, statistically it’s far more likely that during someone’s working life they will be off work due to illness or injury, rather than die. It’s vital that people understand the importance of having cover beyond just life insurance.
She adds: “Even though lenders no longer insist on taking out life insurance to get a mortgage, buying a home is still a significant trigger for people to buy protection insurance. It’s a simple way to ensure the family home is protected if the main breadwinner dies, but we need to look beyond just the risk of premature death.”
