5 Interesting Life Insurance Statistics

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.

  

  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.

  

  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.