Eight in 10 homeowners paying a monthly mortgage do not have income protection, according to a report from Royal London.
Tackling the gender pension and wealth gap which surveyed 3,000 adults in the UK, also found two thirds had 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 two thirds of all of those surveyed had life cover, less than a third (29%) of renters had life cover, and only 6% had income protection.
Jennifer Gilchrist, protection expert at Royal London, (pictured) said: “With so many people in the UK already struggling to make ends meet, the thought of a family member losing their salary during a cost of living crisis is unimaginable.
“Wanting to protect yourself and your loved ones financially should hard times hit is natural, yet many families are leaving themselves financially exposed. It’s important that awareness is raised about the positive impact of having insurance in place and the difference it can make to improve people’s financial resilience.
“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.
“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.”
Emma Astley, founder of Lancashire-based Cover My Bubble, said: “The rising cost of living means many families up and down the UK are acutely aware of their outgoings and the need to protect their monthly bills.
“Protection insurance goes way beyond just life insurance, with the benefit of protecting your mortgage.
“We know our customers often get the biggest reassurance from putting cover in place for their income and expenses, rather than for their life or mortgage cover.”
Astley added where some people need their entire mortgage amount covering, others want the reassurance that their monthly rent and essential bills are protected.
“As many employers don’t provide sufficient sick pay to cover for prolonged time off work, providing critical illness and income protection gives individuals and families peace of mind that bills can still be paid when illness and injury strike,” she continued.
“We also need to create more awareness for families who rent to consider their requirements and put in place the right package of cover. It’s generally accepted that for complete financial protection a little bit of each cover is ideal.
“Accessing advice means individuals’ needs are assessed, allowing families to put in place a package that provides reassurance and gives them protection for many potential life events.”