2008
(25/03/2008) UK families underinsure their lives by £2.5trillion
March 25 2008. UK families are under-insured by £2.5 trillion, equating to a total shortfall of £176,776 for the average UK family, according to figures from AXA's international Protection Scope survey.
The findings are all the more worrying as the Protection Scope research found the UK is the second most indebted nation after the US, with 64% of UK adults having loans, compared to 70% in the US. (44% of adults in the UK have their loans insured)
The analysis, which used pan-European research to compare average life insurance cover against household income, un-insured debt and average asset value, concluded that almost three quarters (72%) of UK adults are under-insured by an average of £96,927 and at risk of significant financial shortfall in the event of a claim.
The survey also found that, while the average UK adult is under insured by almost £97,000, few recognise the risk. More than one-in-three (38%) of those surveyed felt they were very well insured against life risks and 36% believed they were reasonably insured.
But the analysis revealed that of those considering themselves to be very well insured, 40% actually had a protection gap, on average being underinsured by £29,530, while 76% of those who considered themselves to be somewhat insured had a protection gap of an average £145,868.
In addition one-in-five (20%) of UK adults have no insurance to cover their loans, despite increasing concerns about economic slowdown and the current economic environment.
Iain Mallon, Head of Protection at AXA, states,
"The existence of a protection insurance gap has long been debated but this study reveals just how big a problem this is for UK adults.
"The study reveals that the average family would be left facing a massive financial shortfall should the worst happen and one or both parents die. This could mean the surviving family members struggle to pay debts, keep up with mortgage payments on the family home, or cope with childcare costs. But worryingly most of those polled for the Protection Scope survey believed they were adequately covered.
"Clearly this is a significant issue which needs to be addressed and we urge people to see an independent financial adviser and ensure that their protection cover continues to keep pace with their changing life situation. Adequate insurance cover should be a core component of any long term financial planning portfolio."
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More information
If you are a journalist and require further information contact:-
Helene Barnes AXA Life press office +44 (0)117 989 5161
Shazia Awan AXA Life press office +44 (0) 07977 789821
Notes to Editors:
Research was conducted among a sample of 4009 adults aged 25 - 65 across a sample of 10 major economically developed countries (Australia, Belgium, France, Germany, Hong Kong, Japan, Spain, Switzerland and the USA).
The research was conducted using CATI telephone interviews
Statistics for the number of families in the UK were obtained from National Statistics 2001 Census. The total number of families in England and Wales is 14,681,841. To obtain the figure for the extent to which families are underinsured in the UK the average amount that families are underinsured by (£176,776) was multiplied by (14,681,841) the number of families in the UK as revealed in the UK Census of 2001 giving us a figure of £2, 595, 397, 124, 616
A family unit is defined by National Statistics as follows: "A family comprises a group of people consisting of a married or cohabiting couple with or without child(ren), or a lone parent with child(ren). It also includes a married or cohabiting couple with their grandchild(ren) where there are no children in the intervening generation in the household. Cohabiting couples include same sex couples. Children in couple families need not belong to both members of the couple".
In the Protection Scope report, the definition of nester falls into the above.
The AXA Protection Account was launched in 2004 and products include Life Cover, Critical Illness Cover, Income Protection Cover, Life or Earlier Critical Illness Cover, Mortgage Income Protection Cover, Accident Sickness & Unemployment Cover and Business Cover: Keyperson Protection, Shareholder Protection and Partnership Protection.
AXA Protection accepts over 80% of lives at normal rates and declines less than 2% of lives. AXA Protection was the first UK insurer to launch full tele-underwriting nationwide and 2007 statistics show just 1.23% non-disclosure for tele-underwritten applications.
AXA Protection was winner of What Mortgage Magazine's award for Best Life Insurance Provider in 2007 and was ranked number one for application turnaround times by LifeSearch in October 2007. Also in 2007, our Level and Decreasing Critical Illness, Stand Alone Critical Illness and Income Protection products received a five star rating for the quality of Cover by Defaqto, a leading independent financial research company.
The AXA Protection Account allows the customer to hold a number of protection covers in one place. The covers have no cash in value at any time.
About AXA
The AXA Protection Account was launched in 2004 and products include Life Cover, Critical Illness Cover, Income Protection Cover, Life or Earlier Critical Illness Cover, Mortgage Income Protection Cover, Accident Sickness & Unemployment Cover and Business Cover: Keyperson Protection, Shareholder Protection and Partnership Protection.
AXA Protection accepts over 75% of lives at normal rates and declines less than 2.5% of lives. AXA Protection was the first UK insurer to launch full tele-underwriting nationwide and 2007 statistics show just 1.23% non-disclosure for tele-underwritten applications.
AXA Protection was winner of What Mortgage Magazine's award for Best Life Insurance Provider in 2007. In 2008 Defaqto awarded AXA 5 Stars for its Level and Decreasing Critical Illness, Stand Alone Critical Illness and Income Protection products. AXA also won Most Improved Provider, Best New Initiative, Best Underwriting Team, Best Individual Impact - Naomi Greatorex, TCF Award and Best Overall Provider at the LifeSearch Awards 2008.
AXA UK is a part of the AXA Group. AXA Group is a worldwide leader in Financial Protection. AXA's operations are diverse geographically, with major operations in Europe, North America and the Asia/Pacific area. IFRS revenues amounted to €94 billion for the full year 2007.
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