5 Interesting Life Insurance Statistics

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21-03-2019

If you have people that depend on you and your salary and who wouldn’t be able to cope financially if you were to pass away, then Life Insurance should be a priority.

  • Life Insurance is designed to pay out a cash lump sum to support your loved ones should the worst happen to you.
  • Life Insurance is often used to cover financial commitments such as an outstanding mortgage, school fees, inheritance tax or funeral costs
  • Optionally include critical illness insurance to provide a cash lump sum should you suffer a serious illness such as cancer, heart attack or stroke.

To show you what’s going on in the UK Life Insurance market, we have compiled some of the most interesting Life Insurance statistics taken from the Drewberry 2018 Protection Insurance Survey and the 2018 Employee Benefits Survey.

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5 Interesting Life Insurance Statistics

  • Life Insurance Penetration Up by 10 Percentage Points Since 2017

    Some great news about Life Insurance that we have to share is that uptake is on the rise. In 2017 our survey found that only 36.7% of the UK working population owned a Life Insurance policy.

    Since then, this figure has increased by nearly ten percentage points – in 2018 we found 46.2% of the working public owned a Life Insurance policy. It’s great news that people are taking financial protection more seriously, but there is still one area where protection is needed.

    Only 28.9% of self-employed professionals in the UK have a Life Insurance policy, despite many self-employed workers having insecure income and little in the way of savings their family could fall back on should the worst happen.

    This can be especially concerning when we consider that many people are grossly underestimating how likely it is that they would need a Life Insurance policy.

    We asked the UK public to estimate how likely it might be for a 35 year old to die within the next 30 years. The average answer we received was that the public assumed a 1 in 45 chance of passing away before 65. However, according to our Life Expectancy Calculator, the actual risk is a frightening 1 in 8 chance.

    Victoria Slade Independent Protection Expert at Drewberry

    It’s great news to see more people taking out Life Insurance, but there’s some way to go before self-employed workers catch up. One of the most common reasons that puts people off buying Life Insurance is that they think it’s expensive. However, our recent findings show that a policy might be a lot cheaper than most people think.

    Victoria Slade
    Independent Protection Expert at Drewberry

  • Life Insurance is MUCH Cheaper than Most People Think

    One of the main reasons given for not having Life Insurance was cost – 47.7% of people without Life Insurance cited this as one of the main reasons.

    Where people overestimate the cost of a policy, they risk missing out on valuable cover for no reason other than a misunderstanding.

    To get a better understanding of why people so often justify not having a Life Insurance policy by saying it is too expensive, we asked the UK public to estimate the cost of a policy.

    We asked them to tell us how much they thought it would cost to insure a 35-year-old non-smoker for £250,000 worth of Life Cover until the age of 65.

    What we found out was that the average respondent thought that such a policy would cost £42.74 per month in premiums.

    With this expectation, it is understandable that a lot of people think of Life Insurance and being too expensive.

    In reality, the actual cost of a policy averages at just £14.35 per month for £250,000 worth of cover. This means that the UK public are overestimating the cost of Life Insurance by as much as 200%!

    You can see for yourself how much a Life Insurance policy might cost you by using our Life Insurance calculator.

  • Over a Quarter of Brits Without Life Insurance Have No Financial Plan for their Family if They Die

    A worrying number of people who don’t have a Life Insurance policy do not have anything like a backup plan that will save their family’s finances if they die unexpectedly.

    When we asked UK workers how they expect their family might cover essential expenses if they were to die, 26% said they had ‘no idea’. 13.1% also assume that their family would have to survive on government benefits.

    Our survey also found that many people are relying on a Death in Service policy to take care of their family.

    While these schemes can offer support, their payout is usually considerably less than what you might get from a Personal Life Insurance policy because it’s limited to a multiple of salary.

    If a lump sum doesn’t suit your or your family’s needs, Life Insurance policies also come in the form of a Family Income Benefit which will pay out your cover in monthly instalments.

    Family Income Benefit may be more suitable for people that want to cover their family’s everyday expenses and other bills.

  • UK Employees Want Group Life Insurance

    Life Insurance is among the top five employee benefits that employees want.

    29% of UK employees list Group Life Insurance as one of the top benefits they want employers to provide, which trumps benefits such as gym memberships, retail discounts, and casual dress codes.

    However, despite Business Life Insurance being in such high demand, only 13.7% of SME employers offer it to their employees.

    For many businesses, this is a missed opportunity to appeal to new talent and offer life-changing benefits to employees.

    Nadeem Farid Head of Employee Benefits at Drewberry

    Group Life Insurance policies offer a lot more than just financial support to employees’ loved ones. They also come with a range of additional benefits and services that employees and their families can use to better manage their health and finances.

    Nadeem Farid
    Head of Employee Benefits at Drewberry

  • UK Insurers Pay Out Far More Claims than People Think

    When it comes to Life Insurance payout rates, the UK public lack faith in insurers to follow through on the promises made in their policies. It seems that a lack of trust remains one of the biggest obstacles for the insurance industry.

    We asked the UK public to estimate how many Life Insurance claims in 2017 were successfully paid. On average, people thought that only 37% of claims were paid out, which is shockingly low in comparison to the reality.

    Despite people thinking that only 37% of Life Insurance claims are paid out successfully, the payout rate of the top Life Insurance providers is actually closer to 99%.

    Insurers
    2015
    2016
    2017
     

    AIG
    92.2%
    95%
    99%
     

    Vitality Life
    99%
    99%
    99%
     

    Zurich
    98.5%
    98%
    99%
     

    Scottish Widows
    98.9%
    99.4%
    98.99%
     

    Aviva
    98.9%
    98.9%
    98.9%
     

    Aegon
    98%
    98%
    98%
     

    Legal & General
    97.9%
    98.6%
    98%
     

    Royal London
    98%
    96.8%
    97.3%
     

    Liverpool Victoria
    97%
    98%
    95%

    As you can see, it’s very rare for Life Insurance providers to reject a claim.

    One of the most common reasons to not pay out includes a lack of disclosure when applying for the policy.

    However, if you provide your adviser with all of the necessary information at the outset and are totally truthful at the application stage, this should go a long way to helping prevent any claim being declined in the future due to non-disclosure.

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Get Life Insurance Advice

If these statistics have got you thinking that Life Insurance may be what you need, don’t hesitate to get in touch.

The team at Drewberry can offer totally fee-free advice on Life Insurance – we’re just on the other end of the phone.

Why Speak to Us?

We started Drewberry because we were tired of being treated like a number and not getting the service we all deserve when it comes to things as important as protecting our health and our finances. Below are just a few reasons why it makes sense to talk to us.

  • There is no fee for our service
  • We are independent and impartial
    Drewberry isn’t tied to any insurance company, so we can provide completely impartial advice to make sure you get the most appropriate policy based solely on your needs.
  • We’ve got bargaining power on our side
    This allows us to negotiate better premiums for you than you going direct yourself.
  • You’ll speak to a dedicated expert from start to finish
    You will speak to a named expert with a direct telephone and email. No more automated machines and no more being sent from pillar to post – you’ll have someone to speak to who knows you.
  • Benefit from our 5-star service
    We pride ourselves on providing a 5-star service, as can be seen from our 2766 and growing independent client reviews rating us at 4.92 / 5.
  • Benefit from the protection of regulated advice
    You are protected. Where we provide a regulated advice service we are responsible for the policy we set-up for you. Doing it yourself or going direct to an insurer won’t provide this protection, so you won’t benefit from these securities.
  • Claims support when you need it the most
    You have support should you need to make a claim. The most important thing when it comes to insurance is that claims are paid and quickly. We are here to support you during the claims process and make sure it’s as smooth and stress free as possible.
rob harvey, head of protection advice at drewberry

If you have a loan or a family who rely heavily on your income, Life Insurance is a vital protection that will cover the things that matter to you.

If you would like to know more about Life Insurance and find out whether it is the right protection for your needs, feel free to contact us today on 02084327333.

Robert Harvey
Head of Protection Advice at Drewberry

Great service assisting me obtain the right product. Would happily recommend Drewberry following their professional and efficient way of working.

Jonathan Chadwick
08/06/2020
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