Page 60 - Phonebox Magazine January 2011

Over the years there has been much research into the level of life cover that is held by individuals. The same conclusion is always reached, namely that there is considerably less cover than there should be. The latest survey, published this month by Barclays, shows that nothing has changed.
In the survey Barclays reveal that, according to their findings, more than half the adult UK population have no life insurance cover whatsoever. Bearing in mind that two thirds of the respondents in the survey are the main bread winners for the family, this potentially leaves millions of children at risk should the worst happen.
What is most interesting is the reasons given for not taking out cover in the first place. The principle reason is perhaps no surprise – it just had not crossed people’s minds to take out cover. With the number of other things to worry about in life, it is perhaps not surprising that this issue gets pushed to one side, particularly as it involves considering one’s own demise (which is understandably not top of most peoples list of things to think about)!
However, second on the list of reasons is the perception that Life Polices do not provide good value for money. This is an intriguing reason because, of course, if you have pure life cover on your own life you never actually benefit from it yourself. It is something that you are doing to benefit your loved ones. Another concern is that
the cost of the cover, compared to the benefits, is too high. This is always a tricky one with any insurance. If you consider a driver who may have paid fully comprehensive car insurance for 30 years without making a claim – is that good value? Some would say no because they could have simply had the cheaper legal minimum of third party cover. Others, however, would value the peace of mind of being fully covered.
It is true to say that a Life Cover policy taken over a specified term (in particular for those at an age when they are raising a family) is unlikely to pay out because thankfully the chances of dying are low. However, what needs to be considered is the devastating financial consequences that can ensue should the unlikely event occur for a parent with young children.
As an indication of the costs, a female non smoker in her mid 30’s would need to pay less than £15 per month to get cover of £250,000 over 25 years*. When you consider the amount the average family spends on insuring their car, house, possessions and even pets, the reluctance to cover their own lives can be slightly baffling.
If you would like to discuss your own need for family protection then please feel free to call us for a free initial meeting. See our advert below.
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Finance Matters
Worrying lack of Life Cover leaves families at risk?