Recent figures suggest that 30% of all adults in the UK are uninsured against death, critical illness, and loss of income through accident, sickness and redundancy. The poll of more than 2000 people for unbiased.co.uk also found that 8% have either cut back or stopped taking out insurance cover in the last 12 months.
The tough economic climate is of course leading many to cut back on expenditure and make savings wherever possible. However, allowing protection to lapse could prove very costly in the long run and leave families vulnerable.
A far better approach would be to conduct a review of your cover and look to replace it at a lower premium. For example, life insurance has generally fallen in price in recent years, so it could be switched to an alternative, cheaper policy without compromising on cover. That’s also likely to be the case where lifestyle has altered and you’ve given up smoking.
Care does need to be taken when considering giving up or switching old critical illness policies. These pay out on the diagnosis of specific diseases and the definitions have changed over the years, so be sure to take advice before cancelling what may be impossible to directly replace.
The poll results also showed that, when asked which insurance was most important in providing long term financial security, income protection ranked well below other cover including motor insurance and buildings and contents insurance.
It never fails to surprise just how many people fail to cover the loss of income in the event of accident or sickness or to protect themselves and their family in the event of death or serious illness. Far from cancelling policies, many should be asking themselves whether they really have an adequate level of cover.