Two-thirds of people might put off investing in life insurance because they over-estimate how much it costs, thinking it to be too expensive, Legal & General has discovered.
According to the research, 65 per cent of people surveyed over-estimated the cost of £150,000 worth of life insurance
; 35 per cent also over-estimated how much it would cost to add critical illness insurance to their life cover.
Almost a quarter of people wrongly guessed that the premium for level term life assurance
over 25 years for a non-smoking man of 25 would cost between £11 and £20 a month, when in fact it costs just £8.
A further 18 per cent thought it would cost between £21 and £30, and 22 per cent estimated that premiums would be more than £30.
To add critical illness insurance
to the policy would cost an extra £18 a month, but 14 per cent of those surveyed thought it would cost at least £21 to £30 extra, while almost a quarter thought this would add more than £30 to the premiums.
"Life cover can start from as little as £6 per month, which even families on a very tight budget may be able to afford." said Karen Blatchford, commercial director for housing at Legal & General. "We're concerned that two-thirds of people are over-estimating the costs of protection."
Ms Blatchford continued by warning that families could find themselves struggling to make ends meet if the a breadwinner were to die or was diagnosed with a critical illness.
Families should ask themselves how they would keep up with mortgage repayments as well as household bills and other expenses, she suggests.
"Just 38% of the people we surveyed have life insurance, which is cause for concern." she said. "People may wish to consider covering not just their mortgage debt, but their family expenditure and bills. Most families would really struggle if there was an unexpected drop in the household income." she said.
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