Many UK households don’t have life insurance, despite having significant financial responsibilities. Most concerning, 42% of mortgage holders don’t have life cover either. So, why is there such a low take-up of life insurance in our country?
Well, it doesn’t help that there are a lot of myths about life insurance that can make people reluctant. Below, we’ll debunk some of the most common myths to finally sort the fact from the fiction.
My insurer will never pay out
Many people believe that insurers rarely pay out on claims. However, recent statistics published by the Association of British Insurers (ABI) offer a different side to this story.
In fact, the percentage of protection claims paid out in 2019 was 98.3% – a record high. Moreover, 2019 saw £3bn paid out on life insurance claims, up by more than £19m year on year, with 97.4% of term life and 99.99% of whole of life insurance claims paid out.
It’s too expensive
With a mortgage, bills and children to feed, the idea of adding a further expense to your outgoings can be off-putting. However, a widely quoted study reveals that people without life insurance typically estimate it to cost nearly 400% more than it actually does. In fact, a lot of life insurance policies can be highly cost-effective. For example, term life insurance is often cheaper than whole of life cover.
I don’t have children, so I don’t need it
Whether or not you have children, a life insurance policy can provide financial security for your loved ones, who may be saddled with heavy costs should you die unexpectedly. These may include, for example, unpaid debts such as student loans or funeral expenses.
My spouse is the breadwinner, not me
Your spouse may bring in the household’s income, but it is likely that you provide other vital services that would be expensive to replace. For example, if you died, how much would it cost for your spouse to pay for childcare so that they can continue working? They could face having to reduce their hours or, in the worst case, give up work altogether.
But I’m young and healthy!
As the coronavirus pandemic has shown us, illness and injury can strike when least expected, so you’re never too young to take out cover. What’s more, taking out life insurance is much cheaper when you’re younger – if you wait until you’re older, then age-related health risks can really ramp up your policy premiums.
Helping you sort the fact from the fiction
Life insurance can be a confusing business. There are so many policies out there – and so many myths that need busting! If you’re not sure, then please get in touch with our expert advisers, who can provide guidance on the type of policy that’s best for you.
Contact us in the office today to see how we can help and to arrange your no-obligation protection review.
As with all insurance policies, conditions and exclusions will apply.