Life Insurance Shortfalls, How to Avoid Them and Protect Your Family

Life Insurance Shortfalls

Even if you have a Life Insurance Policy in force, are you sure you have enough to keep your family protected should the worst happen? According to a 2019 report only around 58% of UK adults with a mortgage have life cover. With 10.96 million of the 14.8 million properties in home ownership being mortgaged, that’s over 4.6 million homes without sufficient cover in place.

While many may think that life insurance is only required to cover a mortgage, highlighted by the fact that 65% of UK adults have no life insurance or protection cover, there are other situations that can result in families being put at risk. Some examples are below and protecting them can make the difference between comfort and hardship for those left behind.

life insurance cover for your family


In 2017/18, 121 of the 123 higher education institutions with access agreements are planning to charge a maximum headline fee of £9,250. Trying to ensure that your children have the best start in life is often very important. The average debt per student in December 2019 was £35,950. A term assurance policy can run until your child leaves university. As a result, you will protect them in the event of your death and avoid substantial debt.


Often you can only draw down a business loan if life cover is already in place. However, if you do have your own business, covering any business debt can avoid hardship to the family in the event of death.  Even without loans, does the family left behind know how to run the business prior to any sale? In the event of the business owner’s death, how would the family receive monies? For a jointly owned business a policy can avoid many issues. For example, Shareholder Protection can ensure the deceased’s family receives proper value for the shares left in that company. If a business is owned in partnership, Partnership Protection can ensure the deceased’s family receives proper value for the share of the partnership that they are left.


Mortgages are probably the major reason for getting a Life Policy in the UK. Ensuring that you own your family home outright is often a priority. However, there are many other sources of debt that could create hardship for your family in your absence.

As of December 2019, the average household in the UK had debts of £59,840. Whilst this may not seem a huge burden, life assurance to cover this can avoid hardship on death of income winner(s).

cover your family


Inheritance tax and increasing funeral costs can add to your family’s burden. Although the terminology seems unduly complicated, calculating potential inheritance tax can be quite simple.  Once calculated, a simple life cover policy can be put in place to pay the tax bill when it falls due. It is possible to arrange a policy to increase or decrease each year to reflect appreciation of your assets, or gifts being made and tax covered during the run off period.


Business Finance Services Co trading as Be Financially Secure is an appointed representative of The On-Line Partnership Limited which is authorised and regulated by the Financial Conduct Authority.

Inheritance Tax Planning advice is not regulated by the Financial Conduct Authority

Life Cover (non-investment) and income protection-The plan will have no cash value at any time and will cease at the end of the term. If premiums are not maintained, then cover will lapse.


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