According to a study from Finder, in 2019, there were 23.7 million protection insurance policies in place, that’s 1.5 million (-6.3%) less than in 2018.
Since 2014, the number or policies being taken out had dropped by almost 6 million (-19%), showing people’s attitudes have changed towards protecting loved ones financially in the event of death.
Life insurance is categorised under the broader category of protection insurance. Other types of insurance may also be worth considering, such as income protection or serious illness insurance.
If your family has a history of critical illness, you may wish to take out serious illness insurance. The majority of providers cover the following:
- Cancer, excluding less advanced cases
- Heart attack
- Stroke
- Kidney failure
- Liver failure
- Cardiac arrest
- Traumatic brain injury
- Major organ transplant
- Motor neurone disease that results in permanent symptoms
Research from Scottish Widows shows many UK households are under-protected in the event of serious illness.
A survey of 5,022 UK adults found that more than a fifth (21%) of households wouldn’t survive financially if they unexpectedly lost their main source of income.
In 2018, only 9% of people had a critical illness policy to protect their household should they or their partner be unable to work due to long-term illness.
More than two-fifths (45%) say that if faced with this situation, they would solely rely on their savings.
However, for 35% of people, those savings would last no more than 3 months, and for 54% they would last no longer than a year.
Gary Burchett, protection director at Scottish Widows, said:
“On a societal level, we increasingly think in the short term, caring more about tangible things in our day-to-day lives.
On a more fundamental level, we’re programmed not to think about the worst happening.
Together, these are dangerous inclinations as people aren’t thinking about insuring their health or life until it’s too late.”
If you’re worried that your insurance company won’t pay out, know that data shows 97% of life insurance claims were paid out in 2018.
Talk to us about planning your personal finances.