Locked out of life insurance
How high house prices stop millennials getting cover
It’s no secret that property prices in the UK have sky-rocketed over recent decades. If you’re one of the millions of millennials who work hard, save what you can, but are still locked out of the housing market, you’re definitely not alone. And chances are, you’re not just a stranger to home ownership, but life insurance too. We spoke to more than 2,000 UK millennials for our report, The Millennial Life Insurance Gap, to find out why young people are less likely to get cover. And it turns out that getting onto the housing ladder is the biggest barrier of all.
Generation Rent lacks life insurance
The stats don’t lie. If you’re 23, there’s an 11% chance you have life insurance, but by the time you’re 38, you’re 4.3 times more likely to have a policy in place. Why? Because owning a home is the best predictor of whether someone has a life insurance policy, and in the UK, homeownership among young people is 40% lower than 20 years ago. This means there is a double impact for millennials, who are less likely to get on the housing ladder, and as a result, less likely to get life insurance.
But the dream of homeownership hasn’t died…
Many millennials are still keen to reach life milestones like marriage and mortgages – if only they could afford it. Of the young people we polled, here are the expenses they told us were more important than paying for life insurance:
- Rent or mortgage (78%)
- Utilities (67%)
- Debt (52%)
In fact, just 20% claimed that dining out, drinking or Netflix were more important than life insurance. So far from being too busy taking selfies to put down roots, many millennials simply have lots of monthly costs to think about – from student debt to car loans – before they think about getting a mortgage and life cover.
Mortgages matter when it comes to life insurance
While there is no legal requirement to take out life insurance when you get a mortgage, in reality some lenders will make it a precondition when you borrow.
In our report, we found that many young people were unaware of the link between life insurance and mortgages. For example, we found that 44% of millennials without life insurance had no idea it could be used to pay off a mortgage in the event they passed away.
Ultimately, the longer young people stay locked out of the housing market, the greater the danger to their financial security. So while sky-high property prices understandably get a lot of attention, it’s just as important that we raise awareness of the life insurance gap among young people.
Find out more about how life insurance can help protect a mortgage.
Read the report
Tired of all the myths about millennials? Read The Millennial Life Insurance Gap for a fascinating insight into how young people really think about their future.