Life insurance is more important to consumers than luxuries

22 January 2008 / by Rachael Stiles
More Brits would give up luxuries such as TV subscriptions and mobile phone contracts before they would sacrifice their life insurance or payment protection policies, research has found.

According to Prudential, in these times of financial crisis when households are struggling as a result of the credit crunch, rising mortgage repayments, and growing consumer debt, individuals are more eager to hang onto those insurance policies which make them feel safe and secure rather than the non-essentials.

TV subscriptions would be given up first by 71 per cent of Brits, and mobile phones would be next, with 47 per cent giving them up before life insurance, which just 11 per cent said they would sacrifice if they found that their budget was getting tighter.

The research illustrates that Britons value life cover the most, with 35 per cent citing it as the most important form of insurance; income protection is the second most important, favoured by 20 per cent of people, and 18 per cent would hang onto other forms of cover, such as Critical Illness Cover (12 per cent), or Payment Protection Insurance (six per cent).

"With financial markets undergoing a period of uncertainty, many people may be feeling less secure with their budgets and may have to face the difficult decision of stripping down their monthly outgoings", said CEO for PruProtect, Sammy Rubin.

"Life insurance-related policies such as income protection can be a vital lifeline, supplying funds to cover day to day costs such as mortgage or debt repayments, or if someone finds themselves in unexpected financial difficulties, such as being unable to work due to illness or injury."

Furthermore, British consumers demonstrate savvy by not getting lured by cheap prices when buying insurance, with 42 per cent choosing a product based on the specifications and exclusions of the policy, compared to 25 per cent who base their decision just on price.

© Fair Investment Company Ltd