While many people insure their homes, car and even their pets, millions of Brits don’t have any life insurance.
According to Swiss Re, the life insurance protection gap in the UK stands at a staggering £2.4 trillion, equivalent to around £100,000 per person. The insurer says that the amount of under-insurance is greatest among single parents, couples with children and those aged 35 and under.
Now, new research from a leading insurer has revealed that one of the reasons for this ‘protection gap’ could be that people think life insurance will cost much more than it actually does. Keep reading to learn more.
Brits overestimate cost of life insurance by 394%
The British public overestimates the cost of life insurance by almost 400 per cent, according to new research from a leading insurer.
Sun Life has found that, on average, Brits think that £100,000 of life cover would cost £50.58 per month when the average premium actually stands at just £10.31.
The research also found that almost half of people (47 per cent) have no idea how much life insurance costs, rising to 53 per cent who said that the cost of life insurance was the reason that they had no cover.
Despite many people wrongly believing life insurance is too expensive, over a quarter of people who don’t have life cover say they are concerned by the lack of protection. 11 per cent said that their family would lose all or most of its income if the worst were to happen, while 8 per cent of people admitted they did not know what the financial implications of not having life insurance would be.
Sun Life also found that just two in five people (39 per cent) with life insurance thought they had enough cover. 11 per cent said they knew they were underinsured while 15 per cent admitted to not knowing how much life protection they have in place.
Dan Lamble, managing director of Sun Life, said: “Our research shows people are not protecting themselves with life cover because they think it is much more expensive than it is; this misconception needs to be addressed.
“It is worrying that there are many families out there who either have no life cover or insufficient cover in place simply because they are overestimating how much it costs. More than a quarter of those who don’t have life insurance say they are concerned about the fact that they are not covered; we need to help these people get cover they can understand and afford so that, should the worst happen, they know their families are protected.”
Experts urge consumers to buy some life insurance
Mr Lamble has called on the insurance industry to “make life insurance more accessible so that more people realise they can afford it”, particularly given the fact that so many people are concerned that they do not have any protection.
Gwilym Pugh from insurance experts im-insured.co.uk said: “Considering that life insurance is a huge 394 per cent cheaper than most people think, getting the right protection needn’t break the bank. An easy way of comparing the cost is to head online where comparison sites can help you to find the right cover at the right price