Calls to increase Life insurance for families with new children

Monday, June 28, 2010

A new report carried out by Axa insurance has suggested that 37% of women do not consider Life insurance to be important or relevant, despite the fact that many have children which need to be provided for in later life. The report has highlighted people’s attitudes to Life insurance, indicating that many see it as an unnecessary expenditure, particularly when starting a family.

The Guardian has recently outlined the importance of having good Life insurance cover to secure the future of dependants, and that it makes sense to purchase cover while parents are still young enough to enjoy the benefits of reduced premiums. Policies for Life insurance differ greatly, and the Guardian has expressed concern that many people do not realise how cheap the insurance can be to procure.

Women are taking more responsibility for finances in the home than ever before, and yet the Axa report stated that over six out of ten women do not have Life insurance cover and do not consider it to be necessary.

Many people are covered by employer benefits such as Death in Service cover, which usually compensates the families of deceased staff with around five times the annual salary earned by the deceased. However, this benefit is only available to actively employed staff, and does not obviously continue upon an employee leaving service to bring up a family.

Term policies offer good cover for young families, with a monthly premium for a certain amount of cover which is payable over the agreed term. However, research suggests that people may not realise that they are not covered if the policy expires.

Nick Bamford, the chief executive of IFA Informed Choice states: If you know what you want, and are a confident buyer, comparison websites are a good part of the shopping-around process. Providers charge widely differing premiums for exactly the same cover, so it's important to shop around. Online brokers include moneysupermarket.com, lifebrokers.co.uk or lifesearch.co.uk. If things are a bit more complicated, then it's worth getting independent financial advice."

Costs can be reduced for people taking up Life insurance policies, by quitting smoking, shopping around and restricting the number of years which people anticipate that their children will remain dependent for.

The Guardian reports that the best-buy, 25-year level-term policy for a non-smoking woman aged 30 next birthday, with a £100,000 benefit that increases with inflation, is from Axa at £5.61 per month. The same cover from Skandia costs over £25 a month.