With news that co-habiting buyers are accounting for the fastest growing family type in the UK – that’s according to figures just released by the Office for National Statistics which also identified that within the 25 – 34-year old demographic some 43% are homeowners – the bigger headline grabber cites the apparent absence of life insurance policies noted in this same demographic. While getting a footing on the first rung of the property ladder remains just a distant dream to many younger people, research indicates that more and more people are landing their first property in collaboration with their partners. However of these, a surprising 38% who have newly acquired, cohabitee homes readily admit to not having arranged any form of life insurance plan to cover for life’s unforeseen eventualities.
These are the findings of a survey carried out by Sainsbury’s Life Insurance, who at the same time discovered that a further 46% of those questioned confessed that they’d experience financial difficulties in meeting their pre-agreed fiscal commitments should either they or their partners (and co-homeowners) have their employment/income source severely compromised by the advent of un-predicted injury, illness or redundancy. Overlooking the vital importance of purchasing an appropriate and far-reaching life insurance policy could come back to haunt new homeowners in a variety of ways further down the road, not least because if mortgages – as the majority are – happen to be held in joint names, then both parties are equally responsible for meeting the regular repayments. In light of the findings having undertaken the research in the first instance, Scott Gorman (Life Insurance Manager at Sainsbury’s Bank) offered this insight into how he sees this chronic shortfall of new home-owning couples failing to grasp the critical nature of life insurance plans, impacting in the future. Gorman; “Our research shows that many believe they would find it difficult to meet their financial commitments without their cohabitee’s income”, before adding; “So we would urge homeowners to consider life insurance.”
The broader implications of not organising life insurance policies for couples entering into a mortgage agreement on a property can end up being grave, as should you start falling behind on monthly repayments on your home there’s always the chance that the property could be repossessed at a distant juncture. So the very real risk of losing your house should make new homeowners sit up and take notice. Sainsbury’s are not necessarily suggesting that all new cohabiting homeowners should immediately rush out and invest in an all-enveloping, whistle and bells life insurance package, rather instigate some rudimentary like-minded insurance product geared up to offer some form of safety net in the event of illness, injury or unemployment befalling either one of the co-habiting mortgage-payers. For example critical illness insurance, mortgage protection insurance and/or income protection insurance proffer alternative contingency plans which are well worth looking into if you’re planning on making your first bricks and mortar purchase anytime soon.