The research also found that 22% of households would only last a month before facing financial hardship, equivalent to 6.3 million households across the UK and that 25% of households do not have any savings in place for emergencies. 47% of those with savings have stopped adding to it due to the rising cost of living.
Of those without savings, 66% would fall into financial difficulties within 12 months if the main breadwinner was unable to work.
Vincent Guadagnino, communications manager at Direct Line Life Insurance, said: "Millions of households would be in an incredibly vulnerable position if the main household earner was to find themselves out of employment, with the impact felt in an incredibly short amount of time. For many households, the impact wouldn't be measured on months but just a few short weeks."
Guadagnino said only 35% of people have life insurance, despite Direct Line's research showing that "most people" see the benefits of having this cover in place.
He concluded: "Many families see January as an opportunity to budget for the year ahead; particularly in these difficult economic times, we would encourage people to review their finances carefully and consider what cover, if any, is right for them."