Life insurance is not something many people want to consider or even discuss. It can be uncomfortable to talk about and seen as an expense worth avoiding. However, it undoubtedly forms the vital foundation of any well-made financial plan. Without it, a death could leave a family in significant financial difficulty.

Knowing this, I was shocked recently by a recent study* that found 70% of UK adults have no form of financial protection. Many of those questioned suggested they would simply rely on savings in the event of a death. A reasonable ‘Plan B’ should you have the assets to do so. However, according to further research#; 36% of UK households have no savings of any sorts and a further 13% have £1,500 or less. These statistics don’t offer much hope for a large proportion of families.

Cost can also be seen as a barrier to people purchasing life insurance when actually it is often not as expensive as anticipated. A non-smoking 40-year-old can buy £100,000 of life insurance over 25 years for as little as £7.39 per month; less expensive than the average cost of insuring your car or even a cup of coffee a week.

On a personal note, I have seen the importance of life insurance first hand. A life insurance policy paid out on the unfortunate and sudden death of a family member. The proceeds went some way to securing the surviving children’s financial futures.

Getting the right level of cover will depend in a large part on individual circumstances. Outstanding mortgage, other debts, current savings and potential lost earnings are all factors which contribute to an appropriate level of cover, with cost usually playing a part.

This is one area where an Independent Financial Adviser can add real value. It’s something one hopes never to need to fall back on, but it can make a dramatic difference to your family should the worst happen.


By Toby Bain DipPFS

*     Research was conducted by Aegon with the Aegon UK consumer panel. Total sample size was 1,300 adults aged 18 and above. Fieldwork was undertaken 7 to 13 August 2018.

#      The Money Charity, The Money Statistics, May 2018.