Life insurance may not be at the top of your shopping list, but arguably it’s one of the most important financial products anyone can take out, and one of the best ways of leaving loved ones provided for financially. Life and other protection insurance don’t just pay a lump sum on death or the diagnosis of a critical illness, they can help provide an income for families hit by an accident, sickness and unemployment, and help parents pass their wealth on to future generations by playing a major role in inheritance tax planning.
WHAT THE STATISTICS SHOW
Sadly, results from an industry survey1 show that this message is failing to get through to those who really need to hear it most. The findings show that 60% of all adults in the UK have no life cover; as many as 17% of UK adults who have financial dependants don’t have life insurance in place with the worst culprits being 35-44 year olds, despite this age group being most likely to have young children and big financial commitments.
When asked why they don’t have life insurance, people often say that policies don’t pay out in the event of a claim, but in reality, 97.7% of claims are accepted as valid. UK insurers pay out a staggering £9.4m every day on protection policies including income protection, critical illness and life insurance. Another common misconception is that cover is expensive; many are surprised to learn that life insurance premiums have come down over the last few years, meaning that monthly life insurance premiums can cost as little as a takeaway. It’s a small price to pay when you consider that having no insurance could mean real financial hardship, especially for less well-off families. The younger and healthier you are, the lower your premiums are likely to be. As you get older you’ll be seen as a higher risk by insurers.
GET THE COVER YOU NEED
The great thing about life insurance is that it can be tailored to meet your needs throughout your life. People’s insurance needs change when they buy a property or have a family, take on more debt or change jobs. Cover can be combined with protection against accidents, critical illness and unemployment too. Why not make your New Year’s resolution to put in place the protection you need for you and your family?
1 Association of British Insurers, Key Facts, 2015