Two-thirds of people believe that life insurance is required to secure their homes in one way or another.

One in three (33%) of those who bought life insurance when they took out a mortgage were told that it was a legal requirement. In addition, a further third were told it was a necessary purchase to secure their home.

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This is according to comparison site ActiveQuote which surveyed 2,000 adults in January 2019.

According to the data, 35% of those quizzed stated they had bought the life insurance product offered by their mortgage provider or Independent Financial Adviser (IFA). In addition, 8% admitted to not knowing they could shop around for life insurance when taking out a mortgage.

Over half (51%) of those that bought income protection insurance were told it was a mandatory requirement. 12% also said they didn’t realise they could shop around for income protection.

ActiveQuote head of partnerships and marketing Rod Jones said: “Our research highlights that there is still a lot of misinformation around what is required to get a mortgage, with one in five admitting they don’t even understand what life insurance and income protection cover them for.

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“While it’s obviously advisable to protect yourself when you’re taking on such a big financial outgoing, it is not a legal or product requirement. What I find most worrying is that, when it comes to life insurance, 64% of those we asked aged between 18 and 24 were told that it was a must-have product. The only generation which came out as a higher percentage was the over-45s – where 80% were told they had to have life insurance.”

He added: “Both life insurance and income protection are great products to buy to cover you when you are making such a large financial decision, but the fact that many customers don’t shop around or felt pressured to buy these products does not reflect well on the mortgage market in terms of ensuring customers are adequately informed about these products and the level of cover provided.

“These are products designed to take financial pressure off people, not to add to it. The reality is that you need buildings insurance when you buy a home via a mortgage provider and your lender will insist on this, but as far as protection products are concerned, they are not mandatory or a legal requirement. Life insurance and income protection are both there for peace of mind when you have a mortgage, but should never be sold as a legal requirement.”