Apathy In Life Insurance Behind 2.3 Trillion Protection Gap

Mon, 10 Mar 2008

Around 20 million adults in the UK are being exposed to unnecessary financial risks due to a lack life or income-related insurance, new research has found.

According to figures from Swiss Re, the UK's protection gap - the difference between the life insurance and financial protection cover Brits have and the amount they require to meet their needs - currently stands at £2.3 trillion.

The poll by Norwich Union revealed that a third of respondents have no life insurance in place because it is still on their 'to do list' or they still remain unaware of its importance, highlighting the levels of apathy to protection in the UK .

Fifteen per cent said they were without life insurance because they have made other provisions, while ten per cent said they have no dependents or feel no need for insurance and 9 per cent stated their lack of a mortgage for not having insurance .

A further three per cent said a lack of understanding in life insurance products is preventing them from taking out a policy .

Darren Dicks, head of protection marketing at Norwich Union, said: "These findings are cause for concern as they suggest many people are taking an ‘it won't happen to me' approach to protection."

"Around 52 per cent of UK adults have no life cover at all and the remainder are either under-insured or unsure about what type of cover they hold."

He added: "There is currently a £2.3 trillion protection gap in the UK which leaves a large proportion of the population vulnerable."

"Many people wait until they have a particular event in their lives, such as a house purchase or the birth of a child before they purchase life cover, but people shouldn't take the view that they need to wait."

The Norwich Union study revealed the key moments which prompt people to make life insurance purchases were buying a first home (44 per cent), followed by moving home (18 per cent), divorce/separation (14 per cent) and getting married/moving in with a partner (13 per cent).
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