Only 32% of people in the UK have life insurance compared to 64% who have taken out an insurance policy to cover their homes, according to new research from wealth manager, Brewin Dolphin.
Showing that there is still some truth in the old adage ‘an Englishman’s home is his castle’, it would seem we place more importance on insuring our homes than our lives.
The figures reveal that whilst we’re happy to protect our latest iPhone purchase (14%), our upcoming holiday from the unpredictability of Covid (21%) and our furry four-legged friends (19%), we’re not so keen to insure our own lives to protect our loved ones. Indeed, 66% of people aged over 35 do not have life insurance cover, and a further 84% do not have critical illness cover.
Meanwhile, 58% of Brits who have pet insurance, do not have life insurance for themselves and 47% of mobile phone users who deem phone insurance necessary have not taken out insurance against their own lives.
Lee Clark, financial planner at Brewin Dolphin, said: “It is not unusual for people to be reluctant to think about their own mortality, especially younger people in their 30s and 40s.
“However, it is important for people during the accumulation phase of their lives, which is generally those under 50, to think about protecting their financial journey.
“Taking out life insurance and critical illness cover can help to transfer risk to an insurance provider. It is a way to help protect the journey towards meeting your financial goals.”
Almost a fifth of the respondents (19%) who have life insurance in place said they do not have, or they are not confident that they have, sufficient life insurance to pay off their debts and provide for their dependents should the worst happen.
Less than half (45%) of those polled say their existing life insurance policy will cover their mortgage and only a quarter (24%) say it would cover their current salary.
A further 15% say it will only cover the basic cost living for their dependents, 4% realised that their current policy covers a previous salary which is lower than their current earnings, and 20% admit they simply don’t know how much their life insurance would cover.
Clark warned that failure to take out a sufficient level of cover “can have devastating consequences resulting in significant reductions to any pay-outs made”.
Clark added: “There appears to be a growing risk of underinsurance in this country – a risk most people are unaware of until it’s too late. Whether it’s to protect your family or other loved ones, it is important to take advice and make a plan, which can be reviewed regularly, to ensure that the people that matter to you are taken care of and that your financial goals can be achieved.”
