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2 in 3 people don’t have life cover despite most agreeing it would benefit their family

2 in 3 people don’t have life cover despite most agreeing it would benefit their family

Oct 21, 2022

Life insurance is there to provide you with the peace of mind that your loved ones will receive financial support if you die.

New research has revealed that most Brits understand the need for life insurance, and the majority agree that it would benefit their family. However, despite acknowledging how important it is, just 1 in 3 people has taken out appropriate protection.

Read on to find out:

  • The gap between people saying they understand the benefits of life cover and those who have taken it out
  • The reasons people haven’t taken out any cover
  • Why many people wrongly believe it is too expensive
  • The reasons people did choose to protect their loved ones.

You can also read about the key benefits of cost-effective cover and why it might be important for you.

Just 35% of people hold a life insurance policy

New research from a leading insurer has revealed there is a substantial gap between households that think life insurance is important and those that purchase cover.

The study, published by Money Marketing, found that while 60% of people agree that life insurance would benefit their family if the worst were to happen, only 35% hold a policy.

Vincent Guadagnino, Communications Manager at the firm who conducted the research, commented: “While we may avoid speaking about it, life insurance is there to give your family vital financial support if you died or were diagnosed with a terminal illness – whether that’s covering mortgages, funeral costs or other debts.

“It is sensible to think ahead and plan accordingly to make sure loved ones are cared for, so we encourage people to investigate a life insurance policy not just for the sake of financial peace of mind, but also to make a smart choice when evaluating personal finances and discretionary spends.”

Many believe life insurance is “too expensive”

The research also revealed that, of those that do not hold a life insurance policy, more than 1 in 3 (35%) believe that this type of protection is too expensive.

This is despite more than 2 in 5 people (42%) admitting they didn’t actually know how much life insurance costs. While factors such as your age, lifestyle, medical history, occupation, and cover chosen will affect the price, many households seem unaware that life insurance policies can start from as little as £5 a month.

While many households acknowledge that cover is important but consider it “too expensive”, the study revealed people are able to find the money for entertainment services.

The research revealed that most households surveyed (71%) pay for at least one monthly entertainment subscription service such as Amazon Prime, Spotify or Apple Music and are willing to spend on average £25 a month.

Vincent Guadagnino adds: “It is encouraging that most households see the benefit of holding a life insurance policy, but it is surprising how only 35% of people have taken one out.

“Our research suggests people expect it to be too expensive without even looking at the potential cost. Despite the cost of living crisis limiting household expenditure, many people are unaware that basic life insurance policies can be cheaper than many streaming services, magazine subscriptions or gym memberships.”

If you want to save money on the cost of your life insurance, we can help. We can scour the market for you and compare the prices from dozens of the UK’s leading insurers, including:

  • Aviva
  • Legal & General
  • LV=
  • Aegon
  • Vitality.

We also take a lower than standard commission rate from insurers and pass this saving onto you. It means that you benefit from even cheaper premiums for the cover you want.

Get an online insurance quote now to see just how cost-effective cover can be.

The top 3 reasons people have taken out life insurance to protect their loved ones

The research also asked the 35% of households who had taken out life insurance what their main reason was for putting the protection in place. Here are the top three responses.

Provide cover for funeral and other costs

Of those who own a life insurance policy, one-third (33%) said that they wanted to provide cover for any funeral and other costs that may arise on death.

According to MoneyHelper, the average cost for a burial in the UK is £4,383, while it costs an average of £3,290 for a cremation.

When you’re grieving and dealing with an emotional time, the last thing you want to be concerned about is how you’ll raise several thousand pounds to pay for your loved one’s funeral.

So, putting some life insurance in place can ensure you receive a tax-free lump sum. This can be used to pay for the funeral and any associated expenses, meaning you have one less thing to worry about at a distressing time.

Making sure loved ones are financially supported

Just under one-third of households with life insurance identified that they took it out to make sure loved ones are financially looked after.

Life insurance is designed to provide financial support – either a lump sum or a monthly income – to enable the deceased person’s family to pay their bills and maintain their standard of living.

For just a few pounds a month you can benefit from the peace of mind that those close to you will receive a payout if the worst happens. They may use this money to replace your income, pay their monthly commitments, and to ensure your children can achieve all the ambitions you had for them.

Pay off debts

The third most common reason that households who had life insurance identified as the reason for taking out cover was to help pay off a mortgage or other debts. 28% of households with protection said this was the key reason for taking out cover.

If you were to pass away unexpectedly, would your loved ones be left with debts? If you have a mortgage, or you owe money on credit cards or loans, you may want to ensure your loved ones have the ability to repay these borrowings if you were to pass away.

While it’s not a legal obligation to take out life insurance when you get a mortgage, experts generally recommend you seek out appropriate protection. This ensures your family can remain in your home if you die, for example, as they may be able to use the life insurance payout to pay off some or all of your mortgage.

Without it, you run the risk of saddling your family with debts that they might struggle to pay when you’re no longer around.

Our five-star service will help you find the cover you need

If you’re one of the people who acknowledge that life insurance is important, but you’ve not yet put cover in place, we can help.

We’ll search the market for you to find the most competitive rate for the cover you need – starting from just a few pounds a month.

Our experts can also help support you through the application process, and we can even help with putting your life insurance in trust, if you’d like us to.

I’m-Insured customers rate us “five stars” on the independent feedback service Feefo, so we’re ideally placed to help you to find the right life insurance for you.

Get a life insurance quote now or contact us to find out more.



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