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2 in 3 Brits over 35 don’t have life insurance – here’s why you should do something about it

2 in 3 Brits over 35 don’t have life insurance – here’s why you should do something about it

Mar 3, 2022

If you’re over the age of 35 and you don’t have any life insurance in place, you’re not alone. New research from a leading UK financial firm has revealed a staggering 2 in 3 over-35s have no life insurance in place, despite the fact that this age group is mostly likely to need protection.

People at the so-called “accumulation” stage of their life – when they are building up wealth – are some of those most in need of financial protection. So, it’s a concern that so few of them seem to have cover in place.

Read on to learn more about this research, and the important reasons you should give yourself and your family peace of mind.

66% of over-35s in the UK have no life insurance

According to new research published in Market Screener, just one-third (32%) of people in the UK have life insurance.

Compare this to the:

  • 64% who have taken out an insurance policy to cover their homes
  • 14% who have protected their iPhone
  • 21% who have insured their upcoming holiday from the unpredictability of Covid
  • 19% who have insured their pets.

The research also found that 58% of people with pet insurance and 47% with mobile phone insurance have not taken out life insurance.

It’s not just people who haven’t taken out cover that could leave their loved ones struggling if the worst happened.

The research also found the even people who did have some life insurance either had insufficient cover or didn’t know whether they would be able to provide enough support to those closest to them.

  • Less than half (45%) of those questioned said their existing life insurance policy will cover their mortgage
  • Only a quarter (24%) said their insurance would cover their current salary
  • A further 15% said their life insurance would only cover the basic cost of living for their dependents
  • 4% realised that their current policy covers a previous salary which is lower than their current earnings
  • 1 in 5 (20%) admitted they simply don’t know how much their life insurance would cover.

Lee Clark from the firm who commissioned the research said: “There appears to be a growing risk of underinsurance in this country – a risk most people are unaware of until it’s too late.

“Whether it’s to protect your family or other loved ones, it is important to take advice and make a plan, which can be reviewed regularly, to ensure that the people that matter to you are taken care of and that your financial goals can be achieved.”

The top 5 reasons people don’t have any life insurance

So, why have so few people who are likely to need life insurance taken out cover? A new study published in Actuarial Post could have the answers.

Their findings revealed that the top reasons people had not taken out cover were:

  • They don’t believe they need it due to having other financial arrangements in place (40%)
  • It’s too expensive (39%)
  • They have an underlying health condition, making life insurance difficult or too expensive (14%)
  • They don’t want to think about it (14%)
  • A belief that insurers never pay out so “there’s no point” (12%).

Let’s tackle these one at a time.

I don’t believe I need it

While it’s true that life insurance claims are normally from older people, the truth is that thousands of younger people die in the UK every year. Figures from Aviva show that, in 2018, 6,763 people aged 20 to 34 died. 20,361 people aged 35 to 49 died in the same year.

You may also believe you don’t need life cover because you have other arrangements in place. Perhaps you have some savings, or a “death in service” arrangement through your employer?

While these may be useful, it’s worth considering just how much financial support these will provide. While your savings may replace your income for a few months, will they provide enough support for your loved ones in the long term?

Furthermore, death in service is usually paid out at between two and four times your salary which is unlikely to be enough to repay your mortgage or to ensure your family can maintain their lifestyle.

It’s too expensive

This is one of the most common myths people have about life insurance (and one we have discussed before).

The simple truth is that life insurance is likely to cost significantly less than your other monthly outgoings. Cover can be as little as a few pounds a month, meaning you can provide peace of mind for your loved ones for less than the price of a takeaway or your TV subscription.

I have an underlying health condition

If you have an underlying physical or mental health condition, you may believe that you simply won’t be able to get cover, or that it may be prohibitively expensive.

Again, this may not be the case. We work closely with many of the UK’s leading insurers to help people with health conditions to put the right protection in place. For example, we help customers with mental health conditions such as anxiety or depression, diabetes, high blood pressure, circulatory and heart conditions, and irritable bowel syndrome (IBS).

We have lots of success in helping clients to find the cover they need so, if you have an underlying condition, get in touch with us to find out how we can help.

I don’t want to think about it

Thinking about your own ill health or death can be difficult. It’s something none of us really want to face.

However, considering what would happen to your loved ones if something happened to you is a vital part of prudent financial planning. Ask yourself questions such as:

  • Could my family continue to pay the mortgage if I was no longer around? Would my loved ones be able to remain in the family home?
  • Could my partner continue to pay the rent/mortgage and bills if my income was no longer coming in?
  • Would my children be able to have the same opportunities and lifestyle if I were to pass away?
  • Could my family pay for my funeral?

It’s likely that, whatever your job or salary, your family would need financial support if something happened to you. So, for just a few pounds every month, you can join the one-third of over-35s who have the peace of mind of having life insurance in place.

Insurers never pay out anyway

This is one of the most common myths about life insurance. However, the official data says that insures do overwhelmingly pay claims.

The Association for British Insurers (ABI) say that, in 2020, 99.99% of whole of life insurance claims were paid, and 97% of term insurance claims. Almost £3.5 billion in claims were paid, with an average claim of £79,304.

We’ll help you find the right cover at the right price

If you’re looking for the peace of mind that your loved ones will be financially supported if you’re no longer around, we can help.

We work with dozens of the UK’s leading insurers and so we can find you the right cover at the very best price. Indeed, we take a lower than standard commission from providers so we can pass on these savings to you.

Get a life insurance quote online now, or contact one of our experts to have a chat.

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