Our Directors attended the PFS Financial Planning Symposium in Birmingham yesterday, which is a day jam-packed full of thought-provoking sessions from some of the industry’s finest speakers. Later in the afternoon I was shocked to see a tweet from M.D Liz Beavis stating a statistic they learned in one of the sessions – a scary 50% of people do not have any form of life cover!? This got me intrigued to uncover more statistics…
Can you believe that, in 2014, of the 26.7 million households in the UK:
- 20.4 million households had contents insurance and
- 20.1 million had motor insurance
- 3.2 million had mortgage protection and
- 0.6 million had term life assurance?
These are seriously alarming statistics!
Of course, motor insurance is compulsory for anybody driving a car so that statistic is guaranteed to be high, but when contents insurance is not a legal requirement it is alarming to see that 76% of households possessed this cover in comparison to 12% of households having mortgage protection and a mere 2.2% possessing term life assurance.
No-one likes to think about the unexpected things that life throws at us such as falling ill or dying, but all too often we deal with situations where clients say “if only we’d thought about this before.”
There are many forms of life cover which can be used to suit different needs, term life assurance and mortgage protection are just two of these:
Term life assurance is an insurance policy that pays out a sum of money if the insured person dies within a fixed period set out in the policy. These policies are usually used to provide for your family once you’re gone; covering living expenses and replacing lost income, enabling your loved ones to maintain a comfortable standard of living, cover bill costs and pay for funeral costs.
Mortgage protection (or mortgage life assurance) is a decreasing insurance plan, specifically designed to protect a repayment mortgage. If the policyholder were to die during the policy term, the policy would pay out a capital sum that will be just sufficient to repay the outstanding mortgage; allowing loved ones to continue living in the family home without the worries of affording the payments.
So, what 50% do you fall into? Are your loved ones protected should the worst happen?
Source: Association of British Insurers (2016) UK Insurance & Long-Term Savings Key Facts