New research conducted on behalf of Royal London reveals over half (59%) of UK adults aged over 50 have no plans in place to cover the cost of their funeral, yet only 7% are worried about how their family will pay for it.
The study by Censuswide Research, among the over 50s, also found that the majority (64%) underestimate the cost of their funeral; and four in ten people over the age of 50 (43%) have not thought about their arrangements at all.
The new findings come as Royal London begins a new drive to shake-up the ‘over 50s’ life insurance market.
While many people over 50 could expect to cover the cost of a funeral and leave a modest inheritance, there is a large, growing minority with no means to pay for essential end-of-life costs. For example, Royal London’s research found that over a third (39%) of people aged over 70 are not saving any money to cover the cost of a funeral. An insurance plan provides an immediate and low-cost solution for this group, but one which has typically provided poor returns in the past.
Commenting on the launch, Jerry Toher, CEO of Consumer at Royal London Group said
“Currently, the market for ‘Over 50s’ insurance plans does not serve customers well. In practice policies can be very inflexible and unfair. Although life insurance remains a very popular product – especially for people with low levels of lifetime savings, who want to leave a legacy after their death –it offers poor value for money for many customers. Sometimes customers and their loved ones are left with nothing despite paying out over the years, which is appalling. We are aiming to transform the market with a product that is fair, flexible and good value.
“We believe our offering is a real game-changer - better for customers’ pockets and peace of mind. Over recent months we’ve spoken to many customers, to get their input. They were very clear, and said they need flexibility and value for money. For example, premiums are returned if a customer dies in the first year, and customers can receive a cash sum on death even if they stop making payments.”
Commenting on Royal London’s new offering, James Daley, Managing Director of the consumer group Fairer Finance said:
“A shake-up in the over 50s protection market is long overdue. Royal London’s new offering addresses some of the worst trends in this market – and crucially it will ensure people can still get a cash sum even if they have to stop paying into their plan after 10 or 20 years. But providing a fairer product only deals with half the problem. The real scandal in the over 50s protection market has been the way products are sold: using ‘trusted’ celebrities and free ‘gifts’ to convert sales, without properly highlighting the downsides and risks of these products.
“It’s crucial for Royal London to prove its commitment to its customers by setting a new bar for transparency and honesty in the way that it markets these products. Over 50s plans are a valuable lifeline for thousands of people, but they’re also the wrong choice for many. So it’s vital that customers are helped to understand their options, and only sign up if they’re sure it makes sense for them. I hope Royal London is successful, and its arrival in this market exerts much needed pressure on existing players to up their game.”
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