A new survey from SunLife shows that people in the UK overestimate the cost of life insurance by a staggering 394% on average. Furthermore, 47% of those people surveyed admitted that they had no idea how much life cover costs.
The nationally representative poll of 1,011 people aged between 18 and 65, which was conducted online by Critical Research, also found that almost half of respondents (48%) cited affordability as the primary reason why they didn’t have suitable life cover
On average, those surveyed thought £100,000 worth of life cover would cost them £50.98 a month. This is nearly five times more than the actual cost of £10.31 a month, which is the average premium for a 25-year term for a 38-year-old.
‘No Idea’ About the Cost of Life Cover
In addition, 47% said they had no idea about the cost of life cover, with this figure rising to 58% for individuals aged 55-65.
Of those people who do not have any suitable cover in place, 26% said they were concerned that they didn’t have life insurance and 11% stated that their family would lose all or most of their income if they become critically ill or died.
Worryingly, 8% of those surveyed said they had no idea what the financial implications would be if they were to become critically ill or die.
Amongst those people who do have life insurance, only 39% were confident that they had enough cover; 11% said they knew they were underinsured; and 15% said they didn’t know how much cover they had in place.
Some Cover Better than None
According to the SunLife research, the UK’s infamous ‘protection gap’ is caused as much by underinsurance as it is by no insurance. However some form of cover is better than none.
Dean Lamble, managing director at SunLife said: “Our research shows people are not protecting themselves with life cover because they think it is much more expensive than it is; this misconception needs to be addressed. As an industry, we have an important role to play – we need to make life insurance more accessible so that more people realise they can afford it.”
A ‘Worrying’ Situation
He concluded: “It is worrying that there are many families out there that either have no life cover or insufficient cover in place simply because they are overestimating how much it costs.
“More than a quarter of those who don’t have life insurance say they are concerned about the fact they are not covered; we need to help these people get cover they can understand and afford so that, should the worst happen, they know their families are protected.”
When we review a client’s protection needs, we always take account of their budget and affordability. In most cases we can tailor a solution to meet their needs at a cost which is much less than the client had first anticipated. Come and talk to us today…
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