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More people thinking about life insurance since Covid, study finds

Father and his two sons playing football

Life insurance pays out a lump sum to your family if you die during the term of the policy. This financial support at a difficult time helps to make sure that the loss of your income doesn't add to the grief.

Perhaps unsurprisingly, the Covid-19 pandemic has led more people to think about their own mortality and how their loved ones would cope financially if the worst happened.

Since the beginning of the pandemic, 5.8 million (11%) adults in the UK have thought about or taken out life insurance policies, according to new research from Canada Life. Leading this trend are 18-34 year olds, with nearly a fifth (19%) considering or taking out life insurance policies.

This comes at a time when nearly seven in 10 (69%) UK adults have paid closer attention to their finances since March last year.

However, as the insurance provider pointed out, there are still 32.9 million (63%) people who have never thought about or do not have an active life insurance policy in place.

Many people are confused by how much life insurance they need and what it covers, separate research suggests.

An analysis of Google searches by insurer William Russell found that there are nearly 10,000 annual searches by UK citizens trying to answer the question 'how much life insurance do I need?'.

The top five life insurance related queries in the UK are:

  1. How much life insurance do I need?
  2. Do I need life insurance for a mortgage?
  3. What does life insurance cover?
  4. Life insurance for parents
  5. Can I have more than one life insurance policy?

How much life insurance you should opt for is an individual choice and depends on several factors, William Russell explained. If you have financial dependants, you should consider how their lifestyle may change without your income. The main things most people want to cover are mortgages, loans and debts, critical illness, family expenses, income replacement and any funeral costs.

As for the mortgage question, you are not legally obliged to have life insurance for a mortgage but some lenders consider it a precondition for letting you borrow money to buy a home.

Dan Crook, protection sales director at Canada Life, said that while talking about death is never easy, it's encouraging that the pandemic has prompted people to think about any unexpected negative financial impacts their family might experience.

"It is concerning, however, that there is still a significant proportion of the population without a life insurance policy in place," Crook added. "As an industry we must do all we can to highlight the importance of protection and the peace of mind it provides, both financially and emotionally, before it's too late."

Posted by Fidelius on July 12th 2021

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