Three in five Brits say they have no life insurance

Would your family be provided for in the event of your death? And, do you have enough life cover in place to repay your mortgage or other commitments? If you don't, you’re not alone.

A new survey has revealed that a worrying number of Brits either don’t have any life insurance or have cover but don’t know exactly what it provides.

Life insurance can provide financial security for your partner and family and ensure your debts are repaid in the event of your death. Keep reading to find out more about this new research and why life cover doesn’t have to cost a fortune.

Just 41% of brits have life cover

A new survey by the AA and Populus has found that fewer than half of all adults have life insurance. The poll of AA customers found that just two in five adults (41 per cent) have some life cover in place and, of those, one in twelve don’t know how much they are covered for.

The worst culprits are 35-44 year olds. Despite this age group being most likely to have young children (60 per cent) and a mortgage (59 per cent) just 43 per cent of them have any life insurance in place.

Younger people are often less inclined to take out life cover either because they don't see it as a priority or because they have other financial outgoings to consider. However, with the cost of cover starting at a few pounds a month, it can provide peace of mind without breaking the bank.

People in their forties and fifties are the most likely to have cover – but even then just over half (57 per cent) have insurance in place.

Mark Huggins, Director of AA Financial Services comments: "Life insurance is generally taken out to cover an outstanding mortgage or to leave a lump sum behind for family to help pay bills in the future.

"It's life-changing events such as having children or buying a house that lead people to think about making provisions in case they’re no longer around."

Two types of life insurance to consider 

If you’re one of the 59 per cent of Brits who don't have any life insurance in place then there are two easy and cost-effective options to consider, as Mr Pugh from im-insured.co.uk explains.

"A mortgage life insurance contract is designed to provide enough cover to repay the balance on a repayment mortgage. The amount of cover decreases every year as the balance of your mortgage decreases and it is designed to make sure that your home loan can be paid off in the event of your death.

"An alternative option is a 'level life insurance' contract. Here, the sum insured remains the same for the duration of the policy. If you were to die during the term of the contract then it would pay out the full sum.

"Most online comparison sites will let you compare the cost of the two different types of cover in order that you can find the most suitable and cost-effective solution for you."

Why it pays to review your protection arrangements on a regular basis

If you do have some life insurance in place then it can also pay to review your protection on a regular basis.

Mr Huggins from the AA adds: "You might not know how much your life insurance will pay out down to the last penny, but it’s important that you know what kind of life insurance policy you have and check it reflects your needs and the requirements of your family, especially as your income and outgoings change over time.

"You might find that since taking out life insurance, for example, you change jobs or have a child and you may want to leave a lump sum or provide a regular income to your family.

"Over 75 per cent of 30-45 years olds insured by AA Life Insurance have less than £150,000 of cover. Is this enough to pay-off their outstanding mortgage should they die? Maybe not, but it’s easy to top-up or take out an additional life insurance policy for the shortfall. "