Life cover ‘myths’ prevent people from taking out much-needed insurance, according to research1.
A survey from a price comparison site revealed that 40% of adults with dependent children have not yet taken out life insurance. When asked why they had not taken out a policy, many of the respondents cited three ‘myths’ about life insurance cover as their main reason.
What is holding people back from taking our life insurance?
The three reasons holding 40% of people back from taking out cover are:
- It’s too expensive (46%)
- Insurers never pay out so there’s no point (14%)
- I don’t want to think about it – it’s too depressing (13%)
Myth 1: Life insurance is too expensive
The monthly cost of life insurance is the most off-putting factor for most of those surveyed – and yet households pay more for some of their monthly streaming subscriptions than they would for a comprehensive life insurance policy.
On average, MoneySuperMarket calculated the monthly cost of life insurance per £100,000 of cover to equal £10.96. By contrast, the average homeowner spends £45 per month on home entertainment, with subscriptions such as Disney Plus, Netflix and Amazon Prime all adding up to a substantial monthly outgoing.
And remember, the younger you are when you take out a policy, the less it is likely to cost, with cover for 18 to 29-year-olds and 30 to 39-year-olds averaging just £5.80 and £7.92 per month, respectively.
Myth 2: Insurers never payout on life insurance
Protection insurers appear to have a bad reputation which, statistics show, is thoroughly undeserved. A record 98.3% of protection claims were paid out by insurers in 2019, according to ABI2 figures, while in 2020 an average of £553,000 per day was paid out in claims for COVID-19-related deaths alone.
Roshani Hill, the ABI’s Assistant Director and Head of Protection and Health, commented, “The high number of claims paid should give people confidence they can trust that their insurance provider will be there when they need them, helping families get back on their feet and providing valuable safety nets when the worst happens.”
Myth 3: Its too depressing to think about life insurance
Thinking about death can feel depressing – the third reason why 40% of people with dependents have not yet taken out life cover.
But think about it this way. We routinely take out contents and buildings insurance to protect them against damage. We don’t really think about our house burning down or being caught in a flood, but we take out home insurance anyway.
It’s there just in case. Similarly, think of life insurance as a routine purchase that’s there on the off chance – just in case.
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