December is the cruellest month
Insurance companies write more life cover policies in January than any other month of the year thanks to customer’s New Year resolution to put their houses in order.
However, Luke Ashworth CEO of protected.co.uk is today warning that by putting off the task until January, potential policy holders are leaving their families exposed at one of the most deadly times of the year.
Luke Ashworth says: “There are always more fatalities in winter, 40,000 more from December to March than in the same time period in the summer. Whilst some of this is down to the cold, there are other factors which make December onwards so dangerous. Darker evenings make driving more difficult, added to this we make unusually long journeys to see relatives. Drinking and driving still poses a real threat, and in the run up to Christmas last year over 80,000 people needed treatment in hospital for Christmas-related accidents. The week leading up to Christmas is the busiest in A&E.
“It’s easy to understand why people delay with all the other expenses that Christmas brings but how would your family cope financially if the worst happened? The average family spends £1,000 on Christmas; just a tiny part of that spent on life cover would mean that your family would be able to continue the lifestyle they’re accustomed to, including Christmas, without your income.”
Most people think it will never happen to them, but the statistics tell a different story. One in seven people in the UK die before they are 65, and yet 61% of families have no financial protection. Every 36 minutes in the UK a parent dies leaving their family with no financial back up plan. Yet curiously, more UK adults insure their pets (15%) and mobile phones (13%) than they do their income in case of ill health or death. (12%).
Single parent families are the most vulnerable. Three quarters of single parent families and 68% of divorced parents with two or more children said that they felt financially ‘under-protected’.
Why this reluctance to insure? Luke Ashworth continues: “Our industry has made life insurance so complicated, time-consuming and expensive, often trying to sell premiums that are unaffordable, that many people have been put off. I set up protected.co.uk in order to do precisely the opposite”.
He is particularly concerned for women. Luke says “They are particularly vulnerable because of the increase in single parent families and the number of women working full time as the main breadwinner. Those women who stay at home and look after the family are also undervalued. Even if they have no financial income, the cost of paying for someone to replace them is very high and a remaining parent is unlikely to be able to fill that role and hold down a full time job.”
Life Cover Christmas Shopping Tips
Follow protected.co.uk’s top tips to financial health with life insurance:
1. Understand the different types of cover
The most popular type of life insurance is level term cover, this means that the amount you are insured for will always stay the same for the duration of the policy, if you are insuring yourself for £100,000, this will never change.
Level term cover can be used to protect your family and for an interest only mortgage.
Decreasing term cover is the other option which is normally used to cover a repayment mortgage. This is a cheaper option as your cover would go down as you pay your mortgage off.
Whichever option you choose, make sure you read the policy documents carefully, and that you fully understand their contents, before you sign anything, to ensure you are getting exactly what you want, need and are paying for.
2. Where to buy cover
Many people still see life insurance as something that needs to be purchased through a bank or Independent Financial Advisor, however, actually it is just as simple to purchase as car insurance which most people these days prefer to do online without even speaking to anyone.
Always compare more than one insurer, using Protected.co.uk’s price comparison service you can compare 10 of the UK’s top life insurers in one place. The prices are always guaranteed to be cheaper than Bank’s, IFA’s and the insurers websites directly.
3. Don’t delay
If you know that you need life insurance, don’t delay in buying it. The younger you are, the cheaper the policy. Life insurance goes up in price every year you get older. The insurers base their customers’ premiums on risk assessment – in the case of life insurance, the key risk is how likely it is that you will die.
4. Consider single policies instead of joint cover
If you are looking to cover both you and a partner, it can sometimes be more beneficial to purchase the cover as single policies rather than joint. Doing so could provide your family with double the amount of protection and will only cost slightly more, so it is always worth investigating both options before committing.
5. Setup your policy in trust
A trust is a free and simple way to ensure that the money from your life insurance will go to the people that you want it to in the event of your death.
If you don’t put your life insurance policy in Trust, the sum it pays out will more than likely become part of your estate and it could mean that your family are liable to pay inheritance tax.
Protected.co.uk provides cover from the UK’s top insurers and has a lowest price guarantee.