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More Britons insure their homes than their lives.

There are a number of reasons why you might need life cover and critical illness cover. If you have dependents, then it is important to make sure that they will be financially secure if something happens to you. If you have a mortgage or other debts, then life cover can help to pay these off.

Critical illness cover can provide you with a lump sum of money if you are diagnosed with a specified serious illness, which can help to cover the cost of treatment and make sure that you and your family are financially secure.

NOT SO KEEN TO INSURE OUR OWN LIVES

But, according to new research [1], only 32 per cent of people in the UK have life insurance. In comparison, to 64 per cent have taken out an insurance policy to cover their homes. Showing that there is still some truth in the old adage ‘An Englishman’s home is his castle’, it would seem some people place more importance on insuring their homes than their lives.

The figures reveal that whilst we’re happy to protect our latest iPhone purchase (14per cent ), our upcoming holiday from the unpredictability of COVID (21per cent ) and our furry four-legged friends (19per cent ), we’re not so keen to insure our own lives to protect our loved ones.

RELUCTANT TO THINK ABOUT OUR OWN MORTALITY

Indeed, 66per cent of people aged over 35 do not have life insurance cover. With a further 84per cent not having critical illness cover. Whilst 58per cent of people with pet insurance and 47per cent with mobile phone insurance have not taken out life insurance.

It is not unusual for people to be reluctant to think about their own mortality, especially younger people in their 30s and 40s. However, it is important for people during the accumulation phase of their lives, which is generally those under 50, to think about protecting their financial journey.

TRANSFER RISK TO AN INSURANCE PROVIDER

Taking out life insurance and critical illness cover can help to transfer risk to an insurance provider. It is a way to help protect the journey towards meeting your financial goals.

Almost a fifth of the respondents (19 per cent) who have life insurance in place said they do not have, or they are not confident that they have, sufficient life insurance to pay off their debts and provide for their dependents should the worst happen.

PROTECT YOUR FAMILY OR OTHER LOVED ONES

Less than half (45 per cent) of those polled say their existing life insurance policy will cover their mortgage and only a quarter (24 per cent) say it would cover their current salary. A further 15 per cent say it will only cover the basic cost of living for their dependents, 4 per cent realised that their current policy covers a previous salary which is lower than their current earnings, and 20per cent admit they simply don’t know how much their life insurance would cover.

Whether it’s to protect your family or other loved ones, it is important to take professional advice and make a plan. This should be reviewed regularly, to ensure that the people that matter to you are taken care of and that your financial goals can be achieved.

MAKE SURE YOUR LOVED ONES ARE LOOKED AFTER, SHOULD THE WORST HAPPEN

We’re here to help you protect your loved ones today, so you don’t have to worry about tomorrow. To discuss your plans or for further information, please contact us.

For more information or to discuss any of the issues raised in this article, please contact your adviser, or call us directly on 0161 359 4227. Further information can also be found at gov.uk.

We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of any articles. All references to taxes and the allowances and reliefs are those available to UK tax payers.  The information in this document is therefore intended only for UK tax payers. The information provided is an overview of our understanding of the tax rules and guidance in place at the time of publication. Levels and bases of, and reliefs from, taxation are subject to change and their value depends on the individual circumstances of the investor. The value of your investments can go down as well as up and you may get back less than you invested. Past performance is not a reliable indicator of future results. The Financial Conduct Authority does not regulate Tax Advice, Estate Planning or Will Writing.

Pareto Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority.

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