New study reveals large gaps in life insurance coverage in the UK

Frontline healthcare workers are now covered by a government life assurance scheme during the coronavirus pandemic. This will give bereaved families a £60,000 lump sum pay-out.

But tragedy can hit any family, at any time. Search interest in life insurance has increased by 49% since the end of 2019. With the average household debt now standing at £9,400, and the poorest 10% of households having debts three times bigger than the value of assets they own, this is perhaps unsurprising.

To show just how prepared the UK is for the future, trusted life insurance broker Reassured has analysed 5 years of internal data*, containing over 130,000 life insurance policies to find out where in the UK is most protected.

The study shows Cleveland in the North East of England ranks as the area with the highest proportion of life insurance policies, with 1,034 residents per 100,000 having life insurance cover:

The Cleveland area includes Middlesbrough, where 49 percent of households are among the most deprived 10 percent in the UK. This may be why people in this area are looking to ease the financial burden for their loved ones after they’re gone.

The City of London (735 life insurance policies per 100,000 residents), Lancashire (453 per 100,000), Cheshire (432 per 100,000) and Dorset (380 per 100,000) complete the top five areas with the highest life insurance coverage.

Interestingly, counties in Scotland and the North of England dominate the most-covered areas.

A large number of insurance companies are headquartered north of the English border. Nearly a quarter of the UK’s life insurance employees are based in Edinburgh. And the city has been home to the UK life insurance business since 1815.

The south London Borough of Croydon is the area with the least amount of coverage, with only 22 people per 100,000 residents having a life insurance policy.

Bromley (56 life insurance policies per 100,000 residents), Southwark (58 per 100,000), Greenwich (89 per 100,000) and Greater Manchester (93 per 100,000) complete the areas with the lowest life insurance coverage.

London boroughs account for all but two of the areas with the least life insurance coverage. The capital regularly ranks as the most expensive place to live in the UK. So, it’s perhaps unsurprising London residents don’t want the perceived additional expense of life insurance premiums.

The data also reveals the average national life insurance premium in the UK is just under £25 a month (£24.95), with premiums ranging from £41.53 per month in the Highlands to as low as £20.59 in Eilean Siar/Outer Hebrides.

Like with car and home insurance, life insurance underwriting is based on a number of complex calculations, meaning people can pay different premiums depending on their age, where they live and level of cover, amongst other factors.