Taking out life insurance might not have been high on your priority list, but a global pandemic could be the thing to change that. With many in the UK having been furloughed at some point this year, careful management of personal finances is more important than ever. In the UK’s Spring peak of the Coronavirus outbreak, a total of £90 million was paid out in life insurance claims related to Covid-19. This equates to £980k per day.
Whilst money can never replace someone, it can be a huge help for the family left behind. Financial restraints and the threat of Covid-19 means taking out a cost-effective life insurance has been considered by many this past year.
But can your postcode impact your premium? The UK’s biggest life insurance broker Reassured has analysed 5 years of internal data, made up of over 130,000 life insurance policies to find the answers.
The data reveals that the average life insurance premium in the UK costs just under £25 a month (£24.95). This works out as approximately half the average monthly mobile phone bill. Considering the difference it could make to your loved ones, life insurance really doesn’t seem that expensive.
Similar to car and home insurance, life insurance underwriting is based on a number of complex calculations, meaning people can pay different premiums depending on their age, location, and level of cover, amongst other factors. Premiums are calculated based on the likelihood of a claim being made. The shorter life expectancy and higher levels of drug-related deaths could explain why residents in the Highlands, Scotland pay the costliest premium in the UK, with an average monthly charge of £41.53.
Regardless of where in the UK you live, the cost of cover can vary significantly between providers. Therefore, it is always best to compare multiple quotes to ensure you receive the best deal. Reassured’s study found that Cleveland, in the North East of England, topped the charts as the area with the highest proportion of life insurance policies. The data shows that 1,034 residents per 100,000 have taken out cover.
Interestingly, Scottish counties make up almost half of the top 10. This could be because a large number of insurance companies are headquartered north of the English border. In fact, nearly a quarter of the UK’s life insurance employees are based in Edinburgh. Looking at the areas with the least life insurance coverage, Reassured data shows that the South London Borough of Croydon is home to only 22 people per 100,000 residents that have taken out a life insurance policy.
IE Note; It is interesting that Scots are keener to take out life cover, as the funeral support grant is up to £1700 in Scotland, compared to a measly £1000 in England. However most funeral directors in Scotland insist on a deposit of about 700 pounds before proceeding with any services, as applying for the funeral grant and getting it, are two separate issues.
London boroughs account for all but two of the top 10 areas with the least life insurance coverage. The capital regularly ranks as the most expensive place to live in the UK. Perhaps it is therefore unsurprising that London residents don’t want the perceived additional expense of life insurance premiums, despite the area ranking 3rd for cheapest monthly premium (£21.44).
View the full set of findings on the Reassured website here.
Commenting on the findings, Phil Jeynes, Head of Corporate Sales at Reassured said:
“It really is eye-opening to see the differences between UK areas when it comes to life insurance coverage and average premiums. But with the UK average premium falling just short of £25 per month, it highlights life insurance could be more affordable than people think.
“To protect yourself and your loved ones, life insurance can offer financial assistance, helping to take some of the stress out of planning for the future. Each insurer uses a different underwriting process, so shop around to get the best deal for you.”