As many as one in five homeowners have no life insurance cover thereby putting their homes at risk, new research indicates.
A survey from life company Scottish Widows, finds more than a third of homeowners have no life insurance at all, while 72% are not insured against critical illness or long term absence from work leaving them to rely on the State.
The provider finds only one in ten homeowners review their life insurance needs upon the birth of a child, while 26% review their requirements for critical illness insurance, against 14% who review their credit cards.
Nick Kirwan, director of protection marketing at Scottish Widows, says new parents in particular are currently being encouraged to take out child trust funds but often do conduct a review of their financial situation after such major life events like the birth of a child, moving house or even changing jobs.
He says: “It is worrying that parents are more likely to review their credit cards than their financial protection, but what is more concerning is the wider issue that a third of the nation’s parents have left themselves completely unprotected.”
Scottish Widows also finds a quarter of respondents do not review their financial protection needs after the birth of their child and the same amount believing there is no need.
Almost two in every ten parents have no idea how they would cope if the main breadwinner in the family was unable to work, while only four out of ten respondents say they could rely on their savings if such a scenario were to unfold.
Kirwan says there is a very real and pragmatic need, particular in cases where a dependent is involved, to consider how loved ones will be looked after in a worst case scenario.
He concludes: “In particular I am astounded at how many parents have a mortgage that is unprotected – in a worst case scenario this means that families are putting the roof over their heads at risk. The cost of bringing up a child is expensive – however the costs that dependents would face during a time of need would be far greater."
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