The Association of British Insurers (ABI) estimates that one in three Britons are without any form of life insurance, and of those that do have cover a further one in three may be under-insured. However, those headline figures don't show the full picture as many industry experts believe the young to be more under-insured, and that may be because of the way that they buy life insurance.
Recent separate surveys into the UK life insurance market commissioned by Norwich Union and Sainsbury's Bank have highlighted that there may be a different approach between the generations when it comes to buying life insurance.
The Sainsbury's Bank survey found that young people tend not to shop around when it comes to buying life assurance and the majority simply choose to go with their mortgage provider. The reason given for this appears to be a form of attrition; that they are already so worn out and over-whelmed by the house-buying process that they readily agree to the cover offered by their lender; it is an easy option as they leave it to the lender to arrange all the details. But, taking this approach may not be in their best interest. A Sainsbury's spokesperson said: "Not shopping around is a big disadvantage for younger people as premiums stay the same throughout the life of the policy, so getting a more advantageous deal with more favourable premiums from the start could save thousands over the life of the policy."
However, a survey by Norwich Union showed that the opposite applies when it comes to those over 30 years old; they will shop around to make sure they have fully investigated the market before committing to a purchase. Norwich Union spokesman Darren Dicks said: "As people get older they become more responsible. They also tend to have children from 30 onwards forcing them to think about things like life insurance." He believes that the combination of life experience and the need to provide for their children means that the over-30s, on the whole, tend to be more financially aware. As a result they will take time to compare life insurance policies and the benefits that they offer, as well as the premiums charged. In addition, as people get older they also tend to have more experience of buying financial services and have more confidence in shopping around to find the best deal.