A new report has revealed millions of Brits don’t know what life insurance is, have never been educated about it, and if it’s a requirement for a mortgage. The 2025 Life Insurance Index, commissioned by UK-lifeinsurance.com – the independent life insurance website created to help users find the best possible life insurance quotes for their circumstances, ascertains Britons’ knowledge about potentially the most financially impactful insurance product on the market. Across 2000 UK adults,the report showed: 

• Nearly a third of Brits think you NEED life insurance to be accepted for a mortgage 
• 40% of millennials believe this to be the true, the highest percentage by age
• Nearly a fifth of Brits don’t know what life insurance is
• Nearly a third of women have never been educated about life insurance vs just 18% of men

This report comes as the Financial Conduct Authority’s Financial Lives 2024 – general insurance protection survey – showed life insurance policy numbers fell amongst mortgage holders. In 2024, 28% of adults held life insurance – down 1% since 2022. Above average declines were for adults aged 25-44 and for mortgage holders. Life insurance holding among mortgage holders declined overall by 3pp between 2022 and 2024 – and most notably among mortgage holders from a household with an income of £30k-<£50k and those aged 35-44. 

Misconceptions with Life Insurance and Mortgages 

As many lenders require life insurance as part of their terms and conditions for lending for a mortgage, many believe it’s a requirement, when in fact it isn’t law. Nearly a third of Brits think you need a life insurance policy in place to be accepted for a mortgage with that percentage rising to 40% for millennials. Regionally, this misconception is most accepted as fact in Northern Ireland, with 44% of respondents there believing it to be law. 

Don’t know what life insurance is or been educated on it 

Nearly a fifth of Brits (18%) don’t know or are unsure what life insurance is with only 67% of Brits saying they know what it is. A quarter of 18-24 years don’t know or are unsure what life insurance is. It is no surprise as less than half of Brits state they’ve been educated about life insurance and nearly a quarter saying they’ve never learned about it. More women lack education, as three in ten women (29%) have never been educated about life insurance, versus 18% of men. Worryingly, a third of people in some towns and cities across the nation have never learned about life insurance, with Norwich (35%), Sheffield (34%), and Plymouth (33%) ranking the highest for no education on the topic in the UK. 

1 in 9 rely on Inheritance to fund major finances 

11% of Brits said they are reliant on inheritance from family members to afford a house or fund retirement. This increased to 13% of 25-44 year olds and 12% of 45-54 year olds. Regionally, 13% of respondents in the East of England and the North East said this was true, the highest nationally, compared to just 6% in Wales and the West Midlands. Plymouth (16%) and Norwich (15%) were the cities that people would rely on inheritance the most. 

A spokesperson for UK-lifeinsurance.com, commented on the report: “This report shows what many of us in the industry already believed; we don’t do a good enough job in educating people about life insurance, what it is, what it is used for, its benefits and its role in estate planning and retirement.”

“Life insurance can be very affordable for most people and can give families real peace of mind to protect their loved ones financially if the worst were to happen. Also, different products can provide personalised solutions to fit people’s goals and aims.”