Mind the insurance gap

March 2017

New research reveals £800,000+ life insurance gap which could be faced
by UK couples in the event of one partner’s death

A staggering 41% of couples have no life insurance policy, according to new research carried out for Budget Insurance. Yet when asked how much they would need to cover household bills and living costs in the event of their partner’s death, people in couples suggest they’d be short by an average of £21,700 a year – leaving them open to a potential insurance gap of hundreds of thousands of pounds should something happen to their other half.

The average annual shortfall soon adds up. Based on the average amount respondents say they would need annually should their partner die unexpectedly, the life insurance gap to retirement age would be:

  • At 30… £802,900
  • At 40… £585,900
  • At 50… £368,900
  • At 60… £130,200

The research found that over 55s are among the least likely to have a policy, with 50% of those surveyed saying they have no life cover. The only group less likely to have a life insurance policy are 18-24 year olds, of whom 53% aren’t covered.

The survey also found that more than a third of couples (39%) haven’t discussed how they would cope financially if their other half died, with almost half saying the subject “just hasn’t come up”, while a quarter (27%) say they just don’t want to think about it. A further 22% of respondents say they don’t tend to worry about the future – and 12% are afraid to tempt fate by talking about it, saying they worry it will cause something bad to happen.

These findings form part of the Together is better report , a comprehensive look at how couples in the UK manage their financial affairs in 2017. Areas covered by the report include how couples organise their household finances, how much they share and who they turn to for advice when it comes to financial matters. 

With the exception of the report’s shocking findings about life insurance, Together is Better gives an encouraging picture of the way the UK’s couples run their household finances today, indicating a shift towards making joint decisions rather than one partner holding the purse strings, and a healthy level of confidence when it comes to financial matters.

Almost half (47%) say they make household decisions together, a dramatic change over the last couple of generations, given that just 19% of over 55s say their parents made joint decisions on their finances. Three quarters (74%) of those in couples say they find it easy to make financial decisions with their partners and just 16% overall admit to burying their heads in the sand on financial matters. 

Budget Insurance Managing Director Mark Townsend said of the findings:

Overall we are pleased to see that couples feel they are good at managing their finances – but our findings reveal a worrying gap in many people’s financial planning.

“Many of us shelve the tricky conversation about how we’d cope if the worst happened, but we all want to protect the ones we love. Facing up to that chat and securing a safe financial future for our partners doesn’t need to be complicated and could  cost as little as a cup of coffee a week. We’d suggest it’s a small price to pay for peace of mind.

-Ends-

Notes for editors

Case studies available on request,

Life insurance gap calculated based on respondents’ average stated requirement of £21,700 a year to cover household bills and living costs in the event of their partner’s death, up to standard UK retirement age (67 for those currently aged 40 and 50 and 66 for those aged 60).

Cost of a cup of coffee comparison is based on the cost of 25 years’ decreasing term cover for a non-smoking couple both aged 25 at £9.26 per month or £111 a year with Budget Life Insurance, compared with 52 cups of Starbucks cappuccino at £2.25 each, or £117.

About the research

2,000 UK adults aged 18+ who are married or live with their partners were surveyed by OnePoll for Budget Insurance between 10 and 16 March 2017.

The full survey findings are available at https://www.budgetinsurance.com/Together.pdf

About Budget Insurance

To date, Budget Insurance has helped almost 3 million customers across the country find great value home, car, van and life insurance products. For motor and home insurance policies Budget works with a UK network of leading insurers and for Life Insurance policies with a selected insurer so customers can be sure they’re getting great cover, at a great price. Budget Insurance’s comprehensive car and van insurance has been awarded a 5 Star Rating by Defaqto

About BGL Group

BGL Group is a leading digital distributor of household finance products to more than 8.5 million customers. The Group is organised in two divisions: Price Comparison and Insurance Distribution and Outsourcing (IDO).

The Price Comparison division offers customers access to a growing range of Car, Home insurance and breadth products (including Life, Travel, Energy and Pet insurance as well as Utilities and Money products). comparethemarket.com is one of the UK’s largest and most popular price comparison sites and LesFurets.com is a leading player in the French market.

In IDO, our partnerships business, Junction, provides car and home insurance through some of the UK’s most well-known brands including M&S Bank, O2, Lloyds Bank and the Post Office; BeagleStreet.com offers life insurance through its simple, fast, online process; and our own insurance brands, Budget and Dial Direct offer tailored Car, Home, Life and Van insurance products all supported by our state of the art contact centres.

comparethemarket.com, Dial Direct and Budget are trading names of BISL Limited and BeagleStreet.com is a trading name of BGL Direct Life Limited.  BISL Limited is authorised and regulated by the Financial Conduct Authority.  BGL Direct Life Limited is an Appointed Representative of BISL Limited.  Both entities are subsidiaries of BGL Group Limited.  Registered Address: Pegasus House, Bakewell Road, Orton Southgate, PE2 6YS. Registered in England no 02593690.  More details are available on www.bglgroup.co.uk.