Homeowners are abandoning life cover to save money
Mon, 29 Nov 2010
Almost half of all mortgage borrowers have never had or have ditched their life insurance policies, according to an investigation by Sainsburys Bank.

The report suggests that without proper cover, around seven million families could struggle to stay in their homes if the main breadwinner dies.

Contrary to popular belief, people don't have to take out a life insurance policy when they get a mortgage . Official figures reveal that of the 925,000 new loans taken out over the past year, for example, only 635,000 are protected by life insurance . Also, payments do not have to be maintained on any life insurance policies that are taken out at the start of a loan .

The industry says that cancellation rates have escalated in the past few years as homeowners try to save cash by cancelling direct debits . However, experts point out the irony is that basic life insurance has been getting cheaper for years and that many policies cost pennies rather than pounds each month.
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