Life insurance provides protection to individuals and their dependents in the event that the worst should happen, meaning outgoings like mortgages and household bills can be covered.
However, MoneySuperMarket’s latest study finds that only 58% of homeowners have life cover, while 40% have avoided taking out a policy.
The top reasons cited by Brits for not taking out life insurance are:
1. They don’t believe they need it due to having other financial arrangements in place (40%)
2. It’s too expensive (39%)
3. They have an underlying health condition, making life insurance difficult or too expensive (14%)
4. They don’t want to think about it (14%)
5. A mis-held belief that Insurers never pay out so there’s no point (12%)
Concerns about cost
According to MoneySuperMarket’s data, life cover premiums start from as little as £4.36 per month – this is based on £100,000 pounds worth of cover for a non-smoking 30 year old for 20 years. This a tenth of the cost the average Brit spends on their monthly home entertainment fees (£47) which includes their TV package and subscriptions like Netflix and Amazon Prime.
Insurers never pay out
The perception that insurers never pay out is not accurate. In 2019, a study by the Association of British Insurers found that the percentage of claims paid out by insurers rose to 98.3%.3
Life insurance by region and age
Northern Ireland has the highest number of life insurance policy holders (66%). It is followed by Scotland (64%) and the North East (63%). Wales and the North West – both 62% - make up the rest of the top five. At the other end of the scale, only 42% of homeowners in Yorkshire and the Humber have life insurance.
When it comes to age, millennials aged between 31 and 40 are the most likely to have cover in place (68%), while only two fifths (41%) aged 61+ have life insurance.
Brits commit to get fit in 2022
Three quarters (75%) have committed to healthier lifestyles in 2022. The most popular ways they plan to improve their health include taking more exercise (44%), eating a healthier diet (43%) and getting more sleep (28%). Practicing mindfulness (16%) and getting an activity tracker (14%) make up the rest of the top five.
The average amount Brits intend to spend getting fit is £36.30 per month. Those aged between 18 to 30 intend to spend the most – an average of £61 – compared to those aged 61+ who intend to spend the least amount at £22.
The perks most likely to incentivise Brits in taking out life insurance
MoneySuperMarket also asked Brits which perks offered by life insurance companies would most likely incentivise them to take out cover. Free activity trackers such as a Garmin, fitbit or an Apple watch (15%) came first. They were followed by discounted gym memberships (10%), reduced price fresh food subscription services like Hello Fresh (10%), and offers on mindfulness / healthy living services (9%) and exercise classes (9%). Discounted prices on GP app services that enable you to see a GP through your mobile device – were of interest to 8% of respondents.
Neal Cross, life insurance expert at MoneySuperMarket, commented: “It’s not surprising that so many of us don’t have life insurance – for young adults, in particular, it can seem like a strange thing to be thinking about when you’re fit and healthy with your whole life ahead of you.
“However, it’s one of the most important items of financial protection that you’ll ever own and can provide you and your loved ones with peace of mind in the unlikely event that the worst should happen – for example, the outstanding balance on your mortgage could be covered.
“Our research finds that many Brits are being discouraged from taking out life cover because they believe it’s too expensive or that insurers rarely pay out. But neither of these reasons hold true: life insurance starts from as little as £4.36 a month – significantly less than the amount people spend on their streaming services every month – while research finds that the vast majority of insurance claims (as many as 98%) are paid out by providers.
“What’s more, with lots of Brits committing to getting fit this year, many policies come with added benefits that can help you in your journey to becoming a better you. Things like fitness trackers and discounted gym memberships are just some of the perks available which can help offset the cost of paying for these individually at their full market value.
|
