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Public overestimates life insurance costs by 400%


The British public overestimates the cost of life insurance by almost 400%, according to research from SunLife.

On average, the public thinks £100,000 of life cover would cost £50.58 a month, when the average premium actually stands at £10.31. The research also found that 47% of people have no idea how much life insurance would cost, rising to 53% for those who cited affordability as the reason why they have no cover.

Over a quarter of people who don’t have life cover are concerned by this, as their family would lose all or most of its monthly income if they were to become critically ill or die. 8% of people did not know what the financial implications of not having life insurance would be.

Even amongst those who do have life insurance, only 39% of people are certain they have enough cover. One in 10 (11%) say they know they are underinsured while 15% say they don’t know how much cover they have in place.

Dean Lamble, managing director at SunLife, commented:
“Our research shows people are not protecting themselves with life cover because they think it is much more expensive than it is; this misconception needs to be addressed. As an industry, we have an important role to play – we need to make life insurance more accessible so that more people realise they can afford it.

“It is worrying that there are many families out there that either have no life cover or insufficient cover in place simply because they are overestimating how much it costs.

“More than a quarter of those who don’t have life insurance say they are concerned about the fact they are not covered; we need to help these people get cover they can understand and afford so that, should the worst happen, they know their families are protected.”

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