Life insurance – are you and your family covered?
Scottish Widows issued press release on 4 May 2011.
New research from Scottish Widows shows that an estimated 28 million of the UK population do not have any life insurance in place, leaving their loved ones vulnerable to financial insecurity if something were to happen to them.
The third Scottish Widows Consumer Protection Report, which details research carried out online by YouGov who interviewed a total of 5,148 UK adults between 23 and 28 February 2011. The figures have been weighted and are said to be representative of all UK adults (aged 18+) on 5,148 UK adults, shows that many are continuing to shun protection products including life insurance, critical illness cover and income protection.
From those surveyed, 97% were aware of life insurance and the importance of having it, however only 44% had cover. Similarly, when it comes to critical illness cover the awareness remains high (86%). However the percent of respondents who have actually taken out a product is worryingly low at just 12%. The same goes for income protection insurance where the awareness is 83%, with take up at just 7%.
The research also shows that almost a quarter of the UK population (23%) say they believe they cannot afford life insurance and when it comes to critical illness cover 26% state this as their primary barrier to not taking it out.
I took a quote today on the Legal & General website. I claimed to be 30 years old, and a non-smoker in good health. For £6 per month I could have cover for 20 years with £102,692 payable at my death or if I became terminally ill.
£6 per month is the cost of insuring a mobile phone with TMobile.
The press release tells us:
- 56% of adults in the UK don’t have any life insurance in place to secure the financial well being of their loved ones,
- More UK adults insure their pets (15%) and mobile phones (13%) than they do their income in case of ill health (12%),
- One-fifth of the population would consider cutting back on critical illness cover (21%) and life insurance (20%) compared to just 15% prepared to cut back on broadband access,
- Over half the population (54%) say they review their finances regularly, yet uptake of protection products remains low.
£100,000 would make a big hole in your mortgage, or at least give stability to a family.
What I am talking about here is life assurance or term assurance. It insures you against death within a fixed period of time. There is no investment and no return at the end of the period. It is not an endowment policy. So it is money thrown away if you survive the period, but less financial security if you do not. That is how insurance works is it not.
Remember we are not financial advisers; we just like to think we talk common sense.