Three-quarters of UK parents with dependent children are unaware they may need more than just life insurance to protect their family's future, says Yorkshire Building Society.
Research commissioned by Yorkshire BS revealed while 64% of parents with dependent children have life assurance to cover their mortgage, more than three-quarters of parents have no policies to protect the rest of their vital expenses, and could therefore be putting the financial security of their children at risk.
The Yorkshire Building Society believes many parents may wrongly think they have “ticked the life insurance box” when they took out life assurance with their mortgage and they have not yet realised this may not be enough to cover the basic day-to-day costs of raising a family.
Figures suggest just 23% of parents have income protection cover and only 27% have critical illness cover, with many parents stating the expense as a reason for lack of protection, while others simply thought it unnecessary.
Despite cost being cited as a main reason for not buying extra cover, the research, carried out by YouGov, demonstrates the average family of four with a monthly income of around £2700 has, after important deductions such as mortgage repayments, a disposable income of just over £560.
The building society suggests this sum would more than pay for additional life cover which it claims is equivalent to the same price as a family trip to the cinema or a computer game as the typical cost of insurance to protect outgoings for a family of four would be around £22 a month.
Andrew Watson, insurance product manager for Yorkshire Building Society, said: “We have noticed that while most people take out term assurance to cover their mortgage, remarkably few take out any form of cover to protect their salary. We were surprised to find that such a high percentage of parents think they cannot afford to take out valuable cover to protect their families against the worst. It is shocking to think how little these policies cost in comparison to how important they are.”
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