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Public overestimate price of life insurance by almost 400%

Posted on 14 June 2015

Research from SunLife reveals...

  • Public overestimate cost of life cover by 394%
  • Almost half have no idea what life cover costs
  • For those with no life cover, affordability cited as main reason why

While we typically overestimate the price of a loaf of bread by 43%*, when it comes to life cover, we are – on average – a massive 394% out, according to research** by leading insurance provider SunLife.

For those with no life cover, affordability is cited as the main reason why, but, on average, people think £100,000 of life cover would cost £50.98 per month; almost five times more than the average premium of £10.31.***

SunLife also found that 47% of people have no idea how much life insurance costs, with this rising to more than half (53%) of those who cited affordability as the reason why they have no life cover. And it seems the misconception of the cost gets worse with age, with 58% of 55-65 year olds admitting they have no idea what life cover costs.

SunLife’s research also shows that of those that do not have life cover, more than a quarter (26%) are concerned that they do not have any in place. One in 10 (11%) said their family would lose all or most of its monthly income if they were to become critically ill or die while 8% said they ‘did not know’ what the financial implications would be.

Dean Lamble, managing director at SunLife comments:

“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.”

And even amongst those who do have life insurance, SunLife’s research reveals that 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 concludes “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.”

Ends

For more information on this release, contact

Rachel Mason, PR Manager, SunLife

0117 322 5431

07920 537480

rachel.mason@sunlife.co.uk

* https://yougov.co.uk/news/2013/10/04/most-voters-cant-guess-price-value-loaf/

**taken from nationally representative poll of 18-65 year olds conducted online by Critical Research. Interviews were completed from 14th February to 20th February 2014. A total of 1011 respondents participated in the survey. Average amount people thought £100,000 worth of cover would cost is £50.98

***Based on £100,000 sum assured, life cover only, 25 year term for a 38 year old (average age of SunLife term life insurance customer) and accepted on standard rates:

  • Non-smoker: £10.31 per month
  • Smoker: £20.14 per month

£50.98-£10.31=£40.67. £40.67/£10.31*100=394%

About SunLife

SunLife rebranded in 2014 but has been around since 1810, making it one of the oldest financial services companies in the UK. The company is a direct-to-consumer financial services provider, offering a range of straightforward and affordable products across insurance, savings and protection.

SunLife’s customer satisfaction score is 97%#. It was the first company in the UK to offer life assurance without a medical and is the market leader in over 50s plans##.

SunLife also conducts regular, rigorous research across financial services and the later life market, and owns the annual ‘Cost of Dying’ report which has been one of the most significant pieces of ongoing research in its field for the last five years.

The company’s ambition is to ‘democratise financial services’ – giving everyday customers access to products that can give them a brighter financial future.

#SunLife new customer satisfaction survey, rolling 6 monthly performance figures, surveys Mar – Aug 2014 for policies taken out between Dec 2013 – Mar 2014.

##Most popular whole of life guaranteed acceptance plan bought directly. ABI statistics up to 31st December 2014.

Here's the information that you need to know about who we are and the other companies that we work with in order to provide our products and services.

Who are SunLife?

Phoenix Life Limited trades as SunLife and is the provider of the Guaranteed Over 50 Plan, SunLife Insurance and the life insurance policy payment option for Funeral Plans. Phoenix Life Limited’s registered office is at 1 Wythall Green Way, Wythall, Birmingham, B47 6WG (registered in England, no. 1016269). 

SunLife Limited distributes financial products and services and is a company limited by shares, registered office: 1 Wythall Green Way, Wythall, Birmingham, B47 6WG (registered in England, no. 05460862). SunLife Limited is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Services Register (registration no. 769427).

You can contact us by post at SunLife, PO Box 1395, Peterborough, PE2 2TR or by phone on 0800 008 6060.

If you choose to add Funeral Benefit Option to your Guaranteed Over 50 Plan, Dignity Funerals Ltd arranges and provides the funeral services, registered office: 4 King Edwards Court, Sutton Coldfield, West Midlands, B73 6AP (registered in England and Wales, No. 00041598). Dignity Funerals Ltd is a member of the National Association of Funeral Directors.

Who provides the Funeral Plans?

Dignity Funerals Ltd arranges and provides the funeral services, registered office: 4 King Edwards Court, Sutton Coldfield, West Midlands, B73 6AP (registered in England and Wales, No. 00041598). Dignity Funerals Ltd is a member of the National Association of Funeral Directors.

The life insurance policy that pays for your funeral will be provided by Phoenix Life Limited, trading as SunLife.

Who provides My Smarter (ISA)?

My Smarter (ISA) is provided by Scottish Friendly Asset Managers Limited. Authorised and regulated by the Financial Conduct Authority. Details can be found on the Financial Services register, registration No. 188832. Member of The Investment Association. Registered Office: Scottish Friendly House, 16 Blythswood Square, Glasgow G2 4HJ.

Who provides the Will writing services?

Hugh James is authorised and regulated by the Solicitors Regulation Authority (SRA Number:303202).

The information contained on this website is based on Hugh James' understanding of the law of intestacy in England and Wales only as at April 2014. The law in Scotland and Northern Ireland is significantly different. This is for information purposes and is not intended to be legal advice.

Who provides SunLife Pet Insurance

SunLife Pet Insurance is arranged and administered by BDML Connect Limited. BDML Connect Limited is authorised and regulated by the Financial Conduct Authority (No. 309140). Registered in England and Wales Number 02785540. Registered Office: 45 Westerham Road, Bessels Green, Sevenoaks, Kent, TN13 2QB.

Who provides SunLife Home Insurance

SunLife Home Insurance is arranged and administered by BISL Limited and underwritten by a panel of insurers. BISL Limited are an intermediary authorised and regulated by the Financial Conduct Authority. Registered in England no. 03231094. Registered office Pegasus House, Bakewell Road, Orton Southgate, Peterborough PE2 6YS.

Who provides SunLife Car Insurance

SunLife Car Insurance is arranged and administered by BISL Limited and underwritten by a panel of insurers. BISL Limited are an intermediary authorised and regulated by the Financial Conduct Authority. Registered in England no. 03231094. Registered office Pegasus House, Bakewell Road, Orton Southgate, Peterborough PE2 6YS.