Do you have enough life insurance cover?

Life insurance is there to support your loved ones financially if you die – helping to cover major costs like mortgage payments, childcare and day-to-day living expenses.

But just 43% of people in the UK have enough life insurance cover, according to a new analysis by financial services firm Hargreaves Lansdown.

The gap is widest for those who often need it most. Only 36% of mortgage holders and 30% of couples with children have enough protection. For single parents, it’s just 10%.

Here, Which? explains who’s most at risk – and how to check if your own cover is up to scratch.

Can income or savings fill the gap?

Not necessarily. While having savings is important, it doesn't always mean you're properly protected. 

According to Hargreaves Lansdown’s Savings and Resilience Barometer, a twice-yearly report that assesses household finances,  just 18% of people without emergency savings or investments have enough life cover. But even among those with over six months' worth of essential spending saved, 51% still fall short.  

This suggests many are relying on savings alone, without checking whether they'd really be enough to support their family in the long run. 

Life insurance is designed to cover major costs, like paying off a mortgage or raising children, that can quickly outstrip even a healthy emergency fund.

Find out more: 

Why do people fall short on life insurance?

Most people don’t set out to be underinsured – but it can easily happen. Here are some reasons why people may not have enough cover: 

Only covering the mortgage:Relying on workplace cover: Delaying the decision:Find out more:

How much does it cost to boost your cover?

Topping up your life insurance might be cheaper than you think. 

According to the latest Barometer, the average shortfall for households with dependents is £89,800 – rising to £194,200 for homeowners with children.

But the cost of closing that gap is relatively low. 

If you have dependents, it could cost around £134 a year to boost your cover. 

For homeowners with at least one child, it’s closer to £321.

If you already have some insurance or savings, it might just be a case of reviewing what you’ve got and adding a little more – not starting from scratch. 

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How to choose the right level of cover

The right amount of life insurance depends on your personal situation, but the goal is always to make sure your family would have enough financial support if you were no longer around. 

Here are four steps to help you work out what you might need:

Understand what your family would rely on: Consider replacing your income:Match your cover to your loans:Review your cover regularly:Find out more: 

source https://www.which.co.uk/news/article/do-you-have-enough-life-insurance-cover-adRBy8T6B1zq