5 reasons you might think life insurance is not for you (and why you may be wrong)

Do you have any life insurance in place to protect you and your loved ones?

If you don’t, research reveals that you’re not alone. A study by Direct Line revealed that, while 3 in 5 UK adults agree that life insurance is important for protecting their family, just 1 in 3 (35%) currently have a policy in place.

Of those who don’t have any cover, a third cited cost as the reason. However, Direct Line also found that most households (71%) pay for at least one monthly subscription service, such as Amazon Prime, Spotify or Apple Music and are willing to spend on average £25 a month.

That means twice as many people pay for an entertainment service as pay premiums for life insurance.

If you don’t have any cover in place, you will likely have reasons for this. However, there are many myths and misconceptions surrounding protection, so it’s important to distinguish the facts from the fiction.

Here are five of the most common reasons why you might think “life insurance is not for me”, and why you may be wrong.

Life cover is too expensive

One of the main reasons Brits elect not to take out life insurance is because they believe it is prohibitively expensive. However, a survey reported by Forbes reveals that 8 out of 10 consumers overestimate the expense of getting a life insurance policy.

Actuarial Post report that, on average, people think £100,000 of life cover would cost £50.98 per month – almost five times more than the average premium of £10.31.

Research has revealed that almost half (47%) of consumers have no idea how much life insurance costs, with this rising to more than half (53%) of those who cited affordability as the reason why they have no life cover.

The reality is that life insurance is likely to cost significant less than you might think. If you’re a healthy adult non-smoker it’s likely that you can find cover starting from around £6 a month – the equivalent of a couple of cappuccinos.

Additionally, working with an expert like I’m Insured can help you to find the cover you need at the best possible price. We will scour the market on your behalf, comparing prices from some of the UK’s leading insurance companies such as Aviva, Legal & General, Scottish Widows, LV=, and Royal London.

There are lots of life insurance choices out there, and we can help you to narrow down your options and find the most cost-effective cover for your needs – in many cases costing less than your Netflix subscription. Get an online life insurance quote now.

Healthy people don’t need life insurance

When you are fit and healthy it’s easily to dismiss life insurance as “something you don’t need”. 

However, it’s important to remember that an unexpected event can happen at any time. Indeed, the Office for National Statistics reports that more than 16,000 people died of accidental causes in England and Wales in 2021 alone – ranging from road deaths to accidental overdoses.

You never know what is around the corner. Additionally, dying unexpectedly when you are young or healthy is likely to leave your loved ones in a more difficult financial position than if you were to pass away in old age.

It’s worth remembering that taking out life insurance when you are young and healthy is likely to result in low premiums. The cost of your protection is likely to be significantly lower than it would be in later life.

Unbiased says that the average cost for level term life insurance can start from £5.83 a month at age 30, rising to £30.20 a month at age 50.

Insurers don’t pay out

If you’ve ever had a bad experience with an insurer – perhaps you had difficulties after a car accident or an insurer refused to pay a home insurance claim – you might believe that insurers will do anything they can to avoid a payout.

When it comes to life insurance, however, this simply is not the case.

The Association of British Insurers reports that, in 2022, insurers paid a huge 97.3% of all life insurance claims in the UK, with payouts totalling more than £3.8 billion.

If you complete your application form truthfully, disclose any information the insurer asks for, and you keep up to date with your premiums, it’s highly likely that the insurer will pay out when you pass away. You can have the peace of mind that your loved ones will receive the financial support they need.

I’ve had previous medical issues and therefore I'm uninsurable

When you take out life insurance, you will have to disclose your medical history as part of the application process.

If you have experienced previous physical or mental health conditions, you may believe that you simply won’t be eligible for cover. 

However, it’s important to remember that not all conditions will affect underwriting, and even those that do may simply increase the cost of your cover, rather than an insurer declining your application. In addition, different underwriters at different insurers will also have their own views and responses to the same medical history.

You’ve previously read about how mental health underwriting is changing, and how insurers are taking a more positive approach to applicants with previous or current mental health conditions.

Don’t assume that, just because you have been ill in the past, you will be refused for cover.

I already have cover through my workplace

Many employers offer a range of perks to their staff, including life insurance and other benefits. So, you may think that you don’t need to take out cover because you have it through your workplace.

While this cover may be useful, it’s unlikely to provide your loved ones with sufficient support if you pass away. “Death in service” benefit typically pays out between two and four times your annual salary. So, if you earned £35,000, your payout may be between £70,000 and £140,000.

It’s unlikely this would be sufficient to repay your mortgage, or replace your income until your children reached adulthood.

Additionally, when your employment ceases, so does the cover. If you move jobs you may suddenly no longer have this benefit.

If you do decide to rely only on your workplace life insurance, you are effectively betting on dying before the retirement age of 67. After that age, you will be forced to take out more expensive cover, exactly when you need it most.

Get in touch

Putting the right protection in place can give you the peace of mind that your loved ones will receive financial support when you’re no longer around. 

Your beneficiaries can use the payout to replace your income and maintain their standard of living. They could also repay your mortgage, giving them the security that they can stay in the family home.

As you have read, life insurance is often cheaper than you think, and we can help you to find the cover you need at the best possible price.

If you want to protect you and your family, get in touch with one of our experts today, or get a life insurance quote online in just a couple of minutes.