RSS Feed

Related Articles

Related Categories

263 billion life insurance black hole as British breadwinners go without cover

7th January 2016 Print

One in four British breadwinners with dependents (26 per cent) have no life insurance, according to new research from MoneySuperMarket. That means almost 8.5 million Brits run the risk of their families facing dire financial circumstances in the event of their death.

With the average life insurance pay-out over £31,000, this equates to a £263 billion black hole in life insurance provision for the dependents of those breadwinners who do not have a policy in place.

The insight found 12 million of the nation’s breadwinners are women – of which two in five (38 per cent) have life insurance, compared to just under half (45 per cent) 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.”

Professions and protection

Frontline public sector workers are the most likely to be at risk of missing a life insurance pay out, with only two in five (42 per cent) breadwinners employed in health and education having a life insurance policy. By comparison, 61 per cent of breadwinners in the 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 per cent of breadwinners in the sector having a policy, while over half (58 per cent) of construction workers also have protection.

Kevin Pratt continued: “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.

“It is vital to read the small print of a policy to understand the level of cover and any exclusions. But it doesn’t have to break the bank. Someone who is 35 can expect to pay just £12 per month for £200,000 of cover for a 25-year term.”