Consumers 'aware of protection but unwilling to invest
More than half of the UK adults has no life insurance, suggests a new survey from Scottish Widows.
Although more than half (54%) of the 5,148 people polled said that they reviewed their finances regularly and 97% were aware of life insurance and the importance of having it, take up remains "exceptionally low" at 56%, according to the insurer. Awareness of critical illness was also high at 86%, yet just 12% of those surveyed had taken out a policy. Awareness of income protection insurance stands at 83% with take up at just 7%.
A quarter (23%) of those polled say they believe they cannot afford life insurance, the main barrier cited by 26% of those who have not taken out critical illness insurance.
The respondents indicated that material goods including the internet and mobile phones were greater priorities for spending than protection. They suggested that, when faced with the prospect of losing their income, they would makes cuts on their expenditure and access their savings. However, most (58%) have less than £2,500 in savings, do not know how much they have or have none at all.
Clive Allison, market director for protection at Scottish Widows, said: "I think that the main problems are that many people don't really know how much it would cost them to take out these products and don't realise how quickly they'd fall into financial hardship if they were unable to work due to illness. Costs are perceived as high but customers don't really know what the cost would be for them - in reality the cost can be equivalent to a monthly Sky TV package, or a couple of Starbucks coffees a week."
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