Life Insurance – Why Does The UK Have A £2.3 Trillion Protection Gap?
Life insurance is something that people often forget or ignore. However, it can be the most important thing you own and could save your family from financial ruin. Life insurance is incredibly important to families, especially in the United Kingdom where the average gap between death and inheritance according to Death Cafe Research stands at £2.3 trillion. The research was conducted by Dr Dominic Hogg who argues that a lack of life insurance has led to a significant reduction in British society's quality of life as fewer children born into financially sound families have been able to provide for their parents in their golden years.
The government estimates that around 33% of people own life insurance. You might have thought that this figure is high; however, the average insurance policy is only worth around £25,080 with the average cost of a funeral standing at £10,400 and life insurance often being used to pay for it. This means that people are spending a significant amount of their money on other things when they should be saving for retirement.
One solution to the problem could be to raise life expectancies in Britain which would definitely solve the problem of not having enough money to cover funeral costs. However, the Office for National Statistics has predicted that it will rise by just 3 more years by 2050, meaning that only a marginal impact would be made on funeral costs. Dr Hogg also believes that life insurance should be provided free of charge to those aged 75 and over because they have paid taxes for many years and should not have to pay for financial protection in their later life. The government is already struggling under the weight of national debt and providing people with free life insurance might prove to be too much.
Although there are currently no concrete plans in place to tackle the problem at present, Dr Hogg believes that the government needs to act now before it's too late. When the average funeral costs £10,400 and there is a gap of £2.3 trillion between death and inheritance it is clear to see that life insurance is an important part of the British economy and could help many families in their old age.
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Source: For the Love of Life – They Can't Take It Away From You on January 2015 at 8:59 pm .
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Source: How To Calculate Life Insurance Needs – Money Crashers on February 2015 at 2:51 am .
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About Life Insurance For Dummies by Nilofer Merchant (Author)
Life insurance is an investment that can make the difference between financial security and total financial ruin, especially for people with a large amount of life insurance coverage. This book shows you how to calculate your life insurance needs, so you can make smart, knowledgeable decisions about what type of life insurance policy is right for you.
Conclusion
Life insurance is a great way to fund the things that you've always wanted to do in life. However, bear in mind that life insurances are not without its own problems and require due diligence before you sign up for any particular plan.
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