A new survey has revealed that millions of families are at financial risk if their main breadwinner were to die because they don’t have any life insurance.
The poll from a leading financial services comparison website has found that one in four breadwinners in the UK do not have any life insurance in place, leaving a huge £263 billion protection gap in the UK.
With life insurance costing from just £6 a month, experts have urged Brits with families and debts to consider some sort of life insurance. Keep reading to find out more.
8.5 million breadwinners are leaving their families at risk
A new survey from a leading financial website has revealed that one in four breadwinners in the UK – equivalent to 8.5 million people – do not have any life insurance in place.
The Daily Mail reports that ‘with average life insurance payouts of £31,000 per person, according to the Association of British Insurers, there is a £263 billion gap for the families of those who don’t have a policy in place.’
The poll of 2,004 people carried out in December found that more men have life insurance than women. 45 per cent of men said they had cover in place compared to just 38 per cent of women.
By industry sector, workers in manufacturing were the most likely to have some sort of life insurance, with over two thirds (69 per cent) saying that they had some cover. 58 per cent of people working in the construction industry had life protection while those working in education and health were least likely to have cover, with just two in five (42 per cent) admitting to having a policy in place.
The survey found that public sector workers are less likely to have life insurance, compared to 61 per cent of those in the private sector.
“Life insurance is there to help provide for your loved ones when they can no longer rely on your income,” explains Kevin Pratt, insurance expert for the website that commissioned the research.
“Anyone with a partner or children who are financially reliant on them should think about life insurance. Avoiding the matter can put loved ones at grave financial risk and it’s worrying to see how many breadwinners – male and female – are doing this,” he added.
Life cover starts from just £6 per month
One of the main reasons generally given for why people don’t have life insurance is the cost of cover. However, life insurance costs from just £6 per month, meaning it is possible to arrange protection for your financial dependents without breaking the bank.
There are two main types of life insurance available, as Gwilym Pugh, insurance expert from im-insured.co.uk, explains: “Many people choose a ‘level term’ insurance policy which pays out a fixed amount if the policyholder dies within a specific term. For example, you may arrange £100,000 of cover for 20 years. If you die within the term, the policy will pay the fixed amount.
“The other main type of life cover is ‘decreasing term’ insurance. This can work out cheaper as the amount insured falls over time if you die – for example to pay off your repayment mortgage.”
The cost of life insurance varies from provider to provider and so it can pay to head online and use a comparison website in order to find the best rates for the cover that you need. Prices for life insurance generally rise as you get older, because as you age the risk of death is greater and the premium reflects this.