The economic downturn may have led more people to appreciate the importance of life insurance, if recent research is anything to go by.
Recent figures published by re-insurer Swiss Re revealed that non-mortgage related life assurance sales have shot up in recent years, and by 8 per cent in 2009 alone. With family protection making up the majority of sales, this is hugely encouraging - especially considering how household budgets have become increasingly squeezed in recent years.
The story, however, is rather different for mortgage related life cover. Sales dropped over the same period, albeit by just 2.6 per cent.
Matthew Lloyd, head of life insurance at Confused.com, says that the development is driven by a combination of factors, not least the lower level of mortgage approvals seen in recent years.
“One of the key triggers for life insurance purchase is still mortgage arrangement, but with the number of first-time mortgage buyers falling, this opportunity is shrinking,” he says.
Also playing a part has been the appearance of family-specific insurance products. Lloyd points out that this has fallen in line with a change in public attitudes to the product, with “people now considering more than just their home when it comes to life insurance”.
Life insurance gap
However, despite these more encouraging signs, there is still a major life protection gap in the UK. Confused.com research recently found that, 60 per cent of people are currently without life cover, with as many as 35 per cent of this figure being parents.
This means that millions of Brits are potentially leaving family members at risk should the worst happen. What’s more, cover needn’t cost the earth – in fact if you compare life insurance with Confused.com, it could cost you as little as 17p a day to get £80,000 worth of cover.
Lloyd points out that “having even a little life insurance in place to cover you and your partner would mean that your loved ones would be looked after financially if one of you died or became ill”.
“This would allow them to keep up the mortgage repayments, pay the household bills, buy food and clothing and maintain their standard of living without having to worry about it,” he adds.
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