Life Insurance is more important than ever

With the UK economy in a deeper recession than previously thought and the cost of living still rising, people are trying to save money where they can. However, for many people choosing to go without life insurance is a false economy that could have dire consequences.

Most people are now aware of the necessity of making arrangements for their retirement and building a pot of savings where possible. However, life insurance products are not necessarily essential, but neither are they necessarily dispensable. It all depends on the circumstances of the individual consumer.

New research shows that single parent families are less likely to have financial protection in the event of death or serious illness. Unmarried parents and same-sex partnerships are amongst those groups are who are also less likely to have life insurance.

According to figures from Sainsbury’s Life Insurance, less than a third of households with single parent families, unmarried partners and same-sex couples are covered through life insurance.
Despite there being a 35.8% rise in the number of unmarried couples cohabiting over the past decade, only 31% of them are covered by life insurance.

One of the prime reasons why families might want to consider taking out life insurance is to protect their children financially in the event of death or a serious illness. A life insurance payout could offer financial stability for anybody you are responsible for who would otherwise be in difficulty.

The research also highlighted that the number of cohabiting same-sex families has increased by 40% over the last 10 years, yet only 23% of them are protected through life insurance.
Compare this to married couples where 50% of them have life and critical illness cover.

It’s not just parents with young children who might want to consider life insurance as an essential financial product. Further studies show that over 4.4 million UK adults rely on the financial support of their parents.

A growing number of over 21 year olds are turning to the bank of mum and dad to cover everyday living costs. This sets parents back an average of £2,103 a year. It isn’t until they reach the ripe age of 38 that parents expect their children to be fully financially independent.

As a growing number of parents expect to keep funding their child until this age, taking out life insurance could be more important than ever. The research found that parents spend an average of £175 a month on each ‘grown-up’ child. On top of this they are contributing an average of £9,476 to important milestones for each child. Parents will help towards further education, buying a home, holidays and weddings for their adult children.

It’s not just children that parents are responsible for, as their elderly parents might need care and financial support. The cost of elderly care is exorbitant and older generations can leave their adult children footing the bill. Research shows that 57% of over 75-year olds would prefer to have care services in their own home rather than go into residential care.

The final factor putting people off getting the appropriate life cover for their circumstances is the possibility of being mis-sold expensive and complicated products. The range of life insurance available is staggering but independent advice is always available to help you choose the right product. Just ensure that any adviser is truly independent and not working on a commission basis.

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