Shocked insurers told that insurance is too expensive
Shocked insurers have found out that most people believe life and critical illness cover is too expensive and cannot afford to take out policies.
More than half the UK adult population (56%) has no life insurance – which adds up to around 28 million people.
More adults are likely to insure their pets (15%) and mobile phones (13%) rather than their income (12%).
One in five consider broadband access is more important than insurance and would cut the cost of life and critical illness policies rather than internet costs.
The big problem, says Scottish Widows, is people regard the internet and mobile phones as essential to their lifestyle, but insuring their lives and health as an expensive luxury.
Clive Allison, Market Director, Protection at Scottish Widows, said: “We realise many people do not like to plan for the unknown, however the importance of doing so cannot be underestimated.
The revelations come from a study by Scottish Widows aimed at finding out why life insurance uptake is so low.
The research revealed almost everyone knows about life insurance (97%) and critical illness cover (86%), but take up was only 12%.
The statistics showed one in four people did not consider taking out policies because they believed they were too expensive.
“Our research shows that the majority of people clearly understand the benefits associated with protection products such as life, critical illness and income protection, but that many still don’t adequately protect themselves, their families and their homes.
“The industry still needs to do more to highlight these benefits to ensure take-up increases, especially in an environment where welfare provision is being eroded, and government is promoting the need for greater self reliance.”
Scottish Widows research shows that when faced with the prospect of loss of their income, over two-fifths (44%)would cut on their living costs, and 43% would delve into their savings.
The problem is 58% of the people surveyed have less than £2,500 in savings, don’t have any at all or don’t know how much they have.
“This would not go far if you consider that the average monthly mortgage in the UK for new borrowers currently stands at £577 a month,” said Mr Allison.