One in three Britons could be forced to sell family home if partner dies unexpectedly, study finds

New research from Tesco Insurance finds that roughly one in three Britons would be forced to sell their family home if a partner died unexpectedly, largely due to a lack of life insurance coverage. The survey highlights that many homeowners would face higher mortgage payments and other costs at a time when they are grieving.

About 30% said they would put the home on the market to cope with the loss of income, while 27% said mortgage payments would be their biggest worry in such a scenario. More than a third (35%) would raid savings to cover expenses, and 18% would take on an extra job to stay afloat. Other responses included 11% who would turn to family or friends for financial help, 10% who would take out a loan, and 8% who would rent out a room or take in a lodger. The findings echo broader concerns about household finances as homeowners face the risk of losing income at once.

Image shows a home and finances, illustrating the financial pressures on homeowners.

Three in five people with a mortgage do not have a life insurance policy, according to the study, and four in five say they have no savings earmarked for emergencies or financial security. Mortgage payments are the top concern for households in the face of an unexpected death, with 27% citing it as their biggest worry. The survey also notes the broader financial fragility that can accompany loss of earnings due to illness or other serious events, including the potential need to support dependents with reduced income.

Life insurance, the researchers say, can help the surviving partner and any children stay in the home even if household income falls. The policy types vary: level-term insurance pays a fixed lump sum if death occurs within a set period; decreasing-term insurance pays a lump sum that declines over the term, often aligning with mortgage balances; and whole-of-life insurance lasts for the rest of the policyholder’s life and pays out when death occurs, though it is typically more expensive. The report emphasizes that there are multiple options, and premiums depend on health, coverage level, and personal circumstances.

Despite the clear financial risks, the study finds that a large portion of homeowners still lack essential protection. The absence of life insurance is paired with a lack of emergency savings, increasing the likelihood that families would face difficult trade-offs during an already painful time. The findings come as insurers advocate proactive planning to shield families from financial shocks linked to bereavement or illness.

Critical illness cover is highlighted as a potential safeguard, providing protection if a serious diagnosis interrupts the ability to work. It costs an average of about £27.90 a month when bundled with life insurance, according to the comparison site Reassured. The data suggest that coupling life cover with critical illness protection could help households weather the financial impact of a health crisis without immediately resorting to selling the family home.

Experts stress that discussing finances and protection policies before tragedy strikes can offer real peace of mind and reassure loved ones that practical steps are in place. Ban Mahsoub, a representative for Tesco Insurance, notes that planning for the future and having honest conversations about money, policies, and beneficiaries can help families navigate difficult times more securely. She adds that starting with a clear picture of monthly household costs is essential to determine the level of cover needed and to align a policy with current living arrangements.

Once a policy is in place, the guidance is to review it annually and adjust for changes in family circumstances, such as the addition of children, a shift in income, or a larger home. The report underscores the importance of updating beneficiaries and ensuring that policy documents are accessible to loved ones. Financial advisers are recommended for those unsure about the cover they need.

In practical terms, households are urged to tally the monthly outgoings required to run their home—mortgage payments, energy bills, food, childcare, and other essential costs—to understand how much life insurance should replace in the event of an income loss. With a clearly calculated need, families can select a product that provides real protection rather than merely offering a nominal benefit. Review and adjustment of the policy should keep pace with life changes, the researchers say, ensuring that coverage remains relevant to the household’s evolving needs.

The core message from Tesco Insurance and other insurers is straightforward: having a plan now can prevent a time of grief from turning into a long-term financial crisis. By establishing appropriate life and, where appropriate, critical illness cover, homeowners may be able to stay in their home and meet ongoing financial obligations even after a partner’s death or in the face of a serious health event.