Why are people failing to take out insurance to protect their financial wellbeing in the UK?
Unlike our foreign counterparts the UK seems to be very sceptical about taking out insurance policies to protect their financial wellbeing and health. Perhaps having the NHS and not actually having to pay for private medical like other countries leads us into a false sense of security?
The reality is two fifths of homeowners are failing to protect their financial wellbeing.
Well people naturally presume that taking out a policy such as Life Insurance is expensive BUT Life Insurance for instance provides protection to individuals and any dependants in the event of a policyholder’s death. This policy covers outgoings like mortgage repayments and bills.
Two-fifths of homeowners are failing to protect their financial wellbeing by not taking out life insurance due to commonly held misunderstandings and concerns about affordability.
Life insurance provides protection to individuals and their dependents in the event of the policyholder’s death, meaning outgoings like mortgages and household bills can be covered.
According to MoneySupermarket 58% of homeowners have life cover, whilst 40% have avoided taking out an insurance policy altogether!
Top reasons why Brits are not taking out Life Insurance:
1. You do not think you need it (but you have a mortgage bills and dependents)
2. You think it’s too expensive (without knowing how much it costs)
3. You have an underlying health condition (more reason to get insured)
4. You’d rather bury your head in the sand and pretend nothing will happen to you (risky especially if you have outstanding debt and dependants)
5. You believe insurers never pay out (perhaps an unproven belief system)
According to MoneySupermarket stats: “life cover premiums start from as little as £4.36 per month, based on £100,000 worth of cover for a non-smoking 30-year-old for 20 years. The price comparison site said that the perception that insurers never pay out is not accurate, pointing out that in 2019, a study by the Association of British Insurers found that the percentage of claims paid out by insurers stood at 98.3 per cent”.
In fact, many insurance companies try to incentivise you to take care of yourself by offering you items and discounted products to help you take care of your health such as:
· Free activity trackers such as a Garmin, Fitbit or an Apple watch
· discounted gym memberships at 10 per cent,
· reduced price fresh food subscription services like Hello Fresh
· mindfulness and healthy living services
· exercise classes
· GP app services that enable you to see a GP through your mobile
Why is insurance important?
Your home and your loved ones are quite honestly the most priceless items for most, and if you do not protect yourself and something happens to you what will your loved ones do? Can they afford to keep the house? Pay the bills? How much value do you bring?
Monetary value is one thing, but to truly care enough to make your loved ones never have to worry is another.