7th January 2016
More than a quarter, at 26% of UK breadwinners with dependents have no life insurance, according to new research.
This means almost 8.5m Brits run the risk of their families facing dire financial circumstances in the event of their death according to research from MoneySuperMarket.
The comparison site’s analysis found that with the average life insurance pay-out more than £31,000, this equates to an eye-watering £263bn black hole in life insurance provision for the dependents of those breadwinners who do not have a policy in place.
The study found 12m of the nation’s breadwinners are women – of which two in five, at 38% have life insurance, compared to just under half, at 45% of males.
Kevin Pratt, insurance expert, MoneySuperMarket said: “Life insurance is there to help provide for your loved ones when they can no longer rely on your income, and while we all understand the necessity of having such a policy in place, it can be a delicate and difficult topic to address.
“Anyone with a partner or children who are financially reliant on them should think about life insurance. Avoiding the matter can put loved ones at grave financial risk and it’s worrying to see how many breadwinners – male and female – are doing this.”
The switching site’s survey found that frontline public sector workers are the most likely to be at risk of missing a life insurance pay out, with only 42% of breadwinners employed in health and education having a life insurance policy. By comparison, 61% of those in major white collar private sector industries – the professional and financial services – are covered.
Overall, those working in manufacturing are most likely to have life insurance, with 69% of breadwinners in the sector having a policy, while over half (58 per cent) of construction workers also have protection.
Pratt added: “Life insurance is a vital part of financial planning; a pay-out can be used to clear any outstanding debts, such as a mortgage, or to cover everyday expenses. It offers peace of mind and reassurance for families, as well as the necessary financial support.
“Premiums vary according to the type of policy and the size of the sum insured and insurers also take into account the risk of a claim when setting premiums. For example, life insurance gets more expensive the older you get and someone with poor health can expect to pay a higher premium. Occupation, hobbies, and other lifestyle factors such as weight and fitness also help to determine the cost of cover.”