Cash point

Families could be leaving themselves financially vulnerable should one partner die and they have an outstanding mortgage.

There is a lot of confusion, and myths, around death-in-service benefit – offered by almost nine out of 10 companies – which pays out a lump sum on the death of an employee.

Many workers think this will pay out a huge lump sum, but research from Direct Line shows it is one- two years’ salary – £27,600- £55,200 – based on the UK average.

Some firms pay out less than a year’s income. If these funds were being relied upon to tackle mortgage debt, it would leave UK borrowers with a shortfall of £67,678, based on the current £121,678 average outstanding balance.

A third of employers don’t automatically pay out to a nominated individual. Money may be paid into a discretionary trust and it can take up to three months or more for it to be released.

Find out what your employer offers and speak to a financial adviser to see if you may need top-up cover.