Life Insurance: Why Does The UK Have A £2.3 Trillion Protection Gap?

Saturday, October 16, 2010

Life Insurance: Why Does The UK Have A £2.3 Trillion Protection Gap?

According to Swiss Re, one of the largest reinsurers in the world, has less than half the population of the United Kingdom in any form of life insurance protection. So, get a figure on the value of the gap. provided with an average income of 20,000 pounds, and that the value of protection between the gains of 5 to 10 times the value required to set the protection gap of £ 2300000000th.

But in all probability, while the difference is huge, £ is 2300000000000 perhaps a little better suited. After all, there are people who are excluded from the basis of age with life cover - a little more than 1 in 5 are under 18, cover the minimum requirements for life and 1 in 6 are effectively uninsurable because it is over 65 years. After a number of people, life insurance is simply not necessary. These are people between 18 and 65 that have aged for no charge. That is, identified no doubt there are many families in the survey by Swiss Re, which are properly classified as in desperate need of life insurance.

So if you life insurance, why stop there?

It is undeniable that many people still do not understand what provides life insurance and why not think about it, it does not matter, and nothing gets done. After all, life insurance is now no fun - there is no window shopping or a pleasure to own. Chances are that if the financial adviser to sit down and talk with them, they remain indifferent and uninsured.

Journal of declaration to the insurance industry tends not to help too. Sunday newspapers are regularly full of stories especially from one family or one that was a rejection of the request. These stories make headlines, and behind them there is always a moving tale of personal tragedy and despair. While giving the industry the life of a tarnished image and creates a sense that one can not be trusted. In practice, if the story of why the request is rejected many times due to the fact that the policyholder missed to read some important information on your application form. However, some versions are definitely wrong and this undoubtedly damaging.

Then there are those who are fully aware that they need life insurance but simply can not be bothered or say they can not afford the premiums. Realistically, for many "can not afford" means "I do not want to pay." You may like to spend 100 € a month in the pub, but are not willing to pay a little on the premium to protect your family's future cut.

Of course, no doubt that some applicants for life insurance companies have found the last quote to really affordable. While in most cases, the coverage of the standard premium to dispose of the last seven years an increase in the number of people, the proposed premium increase significantly if the insurer has reviewed your application seen have seen. If the result of the companies that make life difficult for people along the definition of the company to "healthy". For seven years, many candidates have since price increases under the classification of insurance companies as a health risk than the average.

Even a few years ago it was obvious that they generally insured difficulties at the usual rates - People with heart or vascular disease, cancer and diabetes suffers former example. How photography has changed now. Application forms are much more detailed and medical problems that were once acceptable is now acceptable only with a higher premium. Take for example the weight - insurers dramatic days in the assessment of the weight of a candidate for a risk to health in the long run. And not only overweight, apparently, to the attention of the insurer. Companies are now determined by BMI, weight problems. This is your weight divided by the square of its size. Most companies now want the life of a BMI of over 29 years, whereas previously was acceptable up to 40. This means that a woman weighs 83 kilos and 1.66 meters high, now face a higher premium.

The application process can be done to certain people. While about 30% of people taking an immediate decision, for others get the procedure may be a delay after another. As if a 14-page application that was not enough, some people will be asked to fill out forms in addition to medical examinations. The entire process may take up to 9 weeks, sometimes longer, before the applicant is exactly the amount of the premium. If the premium is intended to afford the applicant may begin too often too tired of the whole process, the new kind of insurance. The result is a new family without life insurance.

Despite these problems, say the companies, thanks to sophisticated underwriting procedures, prices are lower today than some years ago. The Internet has had a profound impact on prices. About 10% of life insurance is purchased online and delivery is the norm. This family has also contributed to longer guaranteed.

However, in the opinion of the author take more than a decade for people covered by life insurance above the level of 50%.

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