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.

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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: best life insurance

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: Many assume clearing the mortgage is enough, overlooking ongoing costs of raising children and running a household.
• Relying on workplace cover: Employer policies may not offer sufficient protection and usually end when you leave the job.
• Delaying the decision: Life insurance can feel like something to sort out later – but waiting too long risks missing out altogether.

Find out more: What is life insurance? The different types explained

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. 

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:

1. Understand what your family would rely on: think about the essential costs they would face. This could include paying off a mortgage or other debts, covering funeral costs, and helping with ongoing expenses such as rent, bills or school fees.
2. Consider replacing your income: many people choose cover that would replace their income for a number of years. This gives their family time to adjust without added financial pressure. If your household has other income or savings, you can factor that in too.
3. Match your cover to your loans: if your main aim is to pay off a mortgage or other debt, you could look at a policy that reduces in value as the balance goes down. This can be a more affordable way to make sure nothing is left unpaid.
4. Review your cover regularly: major life events such as having children, buying a home or getting married can change your financial responsibilities. It is worth checking your policy from time to time to make sure it still fits.

• Find out more: Joint vs single life insurance: which is best for you?