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Insurance Directory >> Life Insurance News
UK Life Insurance News
Friday, January 07, 2005
According to a survey from Direct Line Life, 41% of Brits have no protection insurance against critical illness, redundancy or death, yet one in three people will contract cancer in the UK.Direct Line Life's research showed that 61% of Brits have some savings but 38% of savers have less than £5,000. This would not sustain an average UK household much longer than 3 months if the main breadwinner fell ill or died4.The protection gapThe research has uncovered a huge protection gap in the UK. 30% of mortgage holders have no insurance to pay off their mortgage if they/their partner die and 72% of respondents have no critical illness cover. It is clear from the research that people neither have adequate protection insurance cover nor do they have adequate savings.Misconceptions about State benefitsWhile many Brits are worried about serious illness, redundancy and death, Direct Line Life's research illustrates that the barriers to buying cover arise from a continuing expectation that the State will help out.- 32% thought they would immediately qualify for Severe Disablement Allowance if they became seriously ill and couldn't work
- 49% would expect the State to help them with mortgage payments but in reality the government will not now assist with mortgage interest payments for the first 9 months of unemployment
- 56% of respondents do not know what state benefits they would be entitled to if they/their partner fell ill and could not work
Living costs ? perception v reality
When asked how much they would need to support their lifestyles if they/their partner fell ill or died, the survey revealed that people are hugely underestimating the monthly amount they would need.
- 30% of respondents thought they would need less than the UK average monthly household expenditure to sustain their lifestyles if they or their partner fell ill
- An incredible 3% said they would need no more than £250 to pay for monthly outgoings should they/their partner fall ill
- 22% believed they would need between £501 and £1,000
The fear factor
Despite the lack of protection cover many respondents are concerned that they have inadequate protection cover: - 58% of under 55s who don't have life cover worry they/their partner might die before retirement
- 23% worry that their dependents would not be provided for financially if they/their partner died
- 32% of males surveyed possess critical illness cover compared to 23% of females Aspirational nest eggs
- 38% of people have less than £5,000 in savings but 24% of Brits would want to have more than £50,000 set aside if they/their partner fell ill and were unable to work
Mind the generation gap
Younger people appear to be the most conscious about critical illness:
- An incredible 43% of 25-34 year olds possess critical illness cover
- Only 28% of 45-54 year olds have critical illness cover yet they are ten times more likely to develop a critical illness than a 25-34 year old
- 22% of respondents believe protection insurance gets cheaper with age when in reality it gets more expensive
Duncan MacKechnie, Managing Director, Direct Line Life, says:"Our survey reveals that people are building nest eggs as the government is encouraging them to do, but we believe that savings are not a long-term solution to counter the financial effects of critical illness, redundancy or death. Worryingly, 38% of people surveyed have savings of less than £5,000, which would not support a UK household beyond three months. We want to encourage people to protect themselves comprehensively as soon as possible rather than rely on their limited savings or State provision".
posted by UK Insurance Index @ 12:15 PM  
News items are intended for information only and should not be relied upon when making insurance decisions. Due to their nature some of the information in these news stories may no longer be current.
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